Joining us live from montclair, new jersey, is the editor at large of inc. Magazine talking. Com and we are about the Paycheck Protection Program. Thank you for joining us. Explain the Paycheck Protection Program and give us this days report on the new law . Now there isht money available for businesses who need it. That allows them to get a loan backed by the fda that will allow you to pay your employees, potentially, while your business is closed. The first round of the money for the program was 349 billion dollars and it ran out after just under two weeks, about 13 days. The second round of money, we believe there is 100 billion left. A lot of people think the program is over, but for Business Owners for whom this is a good solution for keeping employees on, there is money Still Available and they should apply. Host what did you learn about part one of the program . What needed improvement . Guest a lot of dissatisfaction a lot of dissatisfaction was centered on the way it was executed, a come First Serve Program a firstcome firstserved program. But the banks decided they would focus on their customers first, which on the face of it makes sense. They focused on customers with whom they had deep relationships. That meant the largest customers got money first, and some smaller businesses are those who didnt have a steady relationship with a bank, were not able to get money from the first program. Sba also had a difficult the handling demand, and rules of the program were intentionally written so that a larger number of companies than normally qualify for sba programs could apply, but that wrapped in Large Public Companies that should not have gotten the money. Those are some of the problems with the first round. Now that people have had more time to look at the program, they are realizing there is trouble with the design. That is what some more recent legislation is trying to fix. Guest is the editor up large at inc. Magazine and has held the program has held the position since 2011. If you are a Small Business owner, call this number, 202 7488000. If you are employed at a Small Business, call 202 7488001. 202 7488002. We are talking about the Paycheck Protection Program, now in phase two has members of congress consider changes. Before we get to calls, we want to look at some dialogue from the senate floor as they headed out of session trying to make changes they ultimately did did not. Here is how it played out. Specifically, the Paycheck Protection Program extension act would do the following. It would allow borrowers 16 weeks to use their loan funds, instead of eight weeks. Small businesses could use the period that they believe works best to coincide with the reopening of the local economy. So some Small Businesses took the loans very early, thinking the shutdowns would not last, or that the pandemic would be on is way down by now, which is is in some states, but not all. This builds in more flexibility, 16 weeks to use the loan fund instead of eight. Deadlinet extends the to apply for a ppe loan from june 30 to december 31. Fact thatcts the shutdowns lasted longer in every we anticipated when we were drafting the bill lee in march. Bail would allow borrowers to use loan funds to purchase personal protective and tont for employees, pay for adaptive investments needed to reopen safely. that is senator collins laying out the details, but give us a sense of where congress is headed . No action was taken by the end of last week. , it waseah disappointing not to see this go through last week. It is important to understand that, no matter if it is in this bill or the heroes bill, there is broad bipartisan agreement this needs to be changed. Right now you have eight weeks from the time you get your money to use that. Keep your you can employees on payroll for eight weeks. The idea was a bridge to reopening. Now, [inaudible] and she mentioned some people got the money early. That wasnt necessarily their choice. There was wide agreement with the first money that it was going to run out, so it was a race for people to get it while it was available. Another part that didnt come up in that clip that there is bipartisan agreement on is this requirement that you need to spend 75 of the money on payroll, at a time when a lot of businesses are having trouble getting employees back, or dont want to pay employees to do nothing if they will then not have the money to pay them when they reopen, that 75 hurdle is looking difficult to clear. That is not something that requires congressional action. The treasury could do it. They are the ones that implemented the rule. But they nice but they see no sign of wanting to change it. Those of the things Business Owners have had most trouble with, the eight weeks to use the money in the 75 requirement. There is broad, bipartisan report support unchanging both of them. The problem is, the earliest Companies Getting the money are close to the end of the eight weeks, so whether they have been able to use that money in the way stipulated to the law, they need clarity. Like to see this changed as after the break. If it doesnt change, at least people have clarity. It will probably mean, however, that the second month of money will not go out as quickly, because people will realize they cannot use it as intended. T victor from alabama, you are on the line. Good morning. Caller good morning. Victor, you are on live with kimberly, we are talking about the Paycheck Protection Program. Professor wood i just talked to a young lady who said i would be next in line. Pedro you are here. Ok. Er let me turn the tv down. I have one question. It is so is it going to be ok for people to pay back money that they have already earned . I understand where you are i understand where you are coming from about paying the but [inaudible] how are they supposed to come out if they have to pay it back . Thank you. You bring up a great point, victor, which is that if a business uses 75 percent of the money to pay employees, and a few other allowed the remaining 25 , then the loan can be forgiven. Wereis the reason people stampeding to get the loans when they became available. Important tot is Small Businesses, the reason you mentioned, many are concerned if they dont use it in the eight weeks or dont you 75 of a table, they will not be able to get forgiven. And most are not in a position to take on more debt, even though it would be a two year loan at 1 . They need loan forgiveness. So it is important that these rules are written or the legislation changed. You are right. They are in a whole, and having more debt is not going to help. It needs to be forgiven to make. T worthwhile pedro Business Owners can pay themselves with these funds . Are there restrictions . Yes, you have to pay everyone essentially what you have paid them in an eight week period last year. You cant if everybody credible raises. You cant prepay expenses to get them into the eight weeks. The spirit of the law, the idea is for you to pay yourself what you would have been making if this had not happened meant to figure that out you use information from last year and you are allowed to use it for yourself and your employees. And again, if you are a 1099 contractor or are selfemployed, you can use this. If you are in a partnership, talk to your accountant, it is more complicated but you can use it. Notforprofits, it is available to a large number of might have a question, im not into typical business, can i pay myself . You can. Pedro might it be used for other forms of compensation is what host host might it be used for other compensation . Yes, a reasonable amount of hazard pay if you have essential workers, other types the employers, the zero Health Insurance, commissions the employers share of Health Insurance, commissions. Host Small Business owner john from new york city, good morning. I have owned a Company Since 2013. I file my llc taxes every year. Through a Charles Schwab bank. Charles schwab doesnt accept applications. I went to my only other bank where i have a personal account, citibank, and citibank told me i could not submit the application because it didnt have a business account because i didnt have a business account. So i have no way to apply. Person, mr. He sba hunt, while back, i wrote to him, called him, didnt your word. Tried calling my senator, a whole process which i going to try to do to see if they can help me. I would like to know where i can apply. This is another problem with the program, . With the program. A lot of banks are no longer accepting application because they have to determine forgiveness and dont want to go through that process. So i would go to a Community Bank and ask if they are accepting application. If not, a number of online lenders are. We have a list on our website, but we have heard of people getting loans, quicken, paypal, cabbage, they are doing a lot of loans, especially for Smaller Companies, and they are set upi would encourage you to k for online lenders. Some are lending money themselves. Some are in partnership with a bank. Some of them have been approved by the fda. I think it will go faster and you will get more transparency if you go with someone who has been approved themselves, but from the beginning, the online lenders to to be involved in this. At the later stages, they are proving important. I hope you will be able to get the loan you need. Host you have written that many fitness understood not understand if they are eligible. What would you tell those folks . Guest i would tell those folks they probably are eligible. The law has been written broadly. There are lots of businesses who would not normally be eligible for sba backed programs and they are eligible for this one. 1099 employees and contractors, sole proprietors, you only had to have payroll last year. You did not have to be profitable when the banks are the online lender in the sda sba looks of these applications, it is not like a traditional loan. The idea is that it will be forgiven. They need to know that you legitimately can pay employees with this loan. No matter how small your business is, you should take a. Look at it franchisees are often not eligible. They are eligible under this program. Same for small nonprofits. It is very broad. Especially forso the Smaller Companies and partnerships who thought they were not eligible, that is a reason there is still money left. Host lets get back to calls. Jim is a Small Business owner in leesburg, florida. What work do you do . Caller thank you for having my call. My wife is a nurse practitioner. We have a virtual practice on phone. She responds to people with virtual care. I am not that hearing you. Host just keep going and you will be able to hear our guest. Caller ok. Question i have i am also the president of our local eagles club. We are a 501 c eight. The bank has told us we are not eligible for the Protection Plan because we rca we are c eight. I do not know why we are not eligible for the c eight. The bank told us we are not eligible. I sent a letter to rick scott, our senator here. He said he is looking into it, but ive not heard anymore back. Host what would you tell jim . Guest my understanding right now is his bank is correct. It is only the c three. In the heroes act, they are looking to expand to c sixes. I would call your representative because they are very conscious of the fact they have left out a number of notforprofit by only limiting it to c3. That is something that is under discussion. For now, i think there is correct. Host what else can you tell us about the heroes act . What else would it do to the Paycheck Protection Program . It would change the amount of time you have to use the money, which is huge. It would change the percentage you need to use on payroll. It would also extend it, which is interesting. The last application was supposed to be june 30. Now it would go to december 31. It implies there would be money left, which no one expected. Right now if your loan is not especially is not forgiving, you need to pay it back within two years. The heroes act would extend that potentially to five. This is a little bit in the weeds, but if you keep your employees on, you can get a rick can get Employee Retention credit. If you get a ppp loan, you cannot get the Employee Retention tax credit. They would change that so you get both at the same time. You could potentially get both at the same time. It would also try to carve out money specifically for businesses with fewer than 10 employees, specifically for notforprofit and also for underrepresented unities. Those are some of the things specific to the Paycheck Protection Program. It will all be negotiated before any of this comes to light. Host lets go to ron in fort lauderdale. What kind of business do you own . Caller i have a Membership Service where we try to encourage people to use cash regenerate would activity into the economy. Up,way that the ppp is set one would have to certify they have an employee. What about companies that are trying to offset the problems and try to help the country . Willu know if the ppp offset those who are interested in hiring people . We would like to hire like 200 people. Thank you. Guest that is a good question. I do not know. The ppp is looking at preserving the employment levels you already have. There is talk of some sort of hiring incentive in the next round in the senate. At this point, i am not really sure how that would work under ppp. It is really looking at preserving the payroll you have now. Host lets go to shall be in tennessee. Cspan. Hi, happy memorial day weekend. , in my local area, a lot of businesses have what i l host keep going if you can. Caller a lot of businesses in my area are between a hard rock a rock and a hard place. Yes, i agree with the male that says, how are they going to pay back into hiring back their employees . Out good. Been worked hard decision, responsibility for all of them. Host thank you. Is there anything there that shall be saved and can respond to . Guest she has corrected has not been worked out well. The law and the guidance we have now is if they use 75 of that money toward paychecks, they will not have to pay back because congress understood these businesses have been hit hard by this. Many of them do not have good choices. They do not necessarily want them to go further into debt. If they can pay 75 of the money they have got from the loan, the other 25 can go to rent, utilities or interest on a mortgage. They will not have to pay it back. That is why so many businesses were interested in the program. Host what has been the between Unemployment Benefits and money being received through this ppp . It took a little while for the ppp to come into play. Explain how that has worked for the average worker. Caller this has been guest this has been very complicated. For Business Owners, the ppp, the potential to turn this into an alternate source of income when the business is closed. For workers, many have the option of a much more generous unemployment package than they used to have. Owners gives business the power to hire workers back. We saw a study that said Something Like 68 of people who are eligible for unemployment are getting more unemployment than they would get if their business could hire them back. They are getting more unemployment than they were making before. For Business Owners, it is very difficult to figure out what to do because some of their employees would be better off on unemployment. The problem is unemployment does not last forever. A lot of Business Owners who are able to offer Health Insurance when their employees to be able to keep that. On unemployment, you generally cannot. If it is a shortterm furlough, some Business Owners are working with their Insurance Brokers to keep people on. That is an important piece of this. Host lets hear from michael. Michael is in cleveland. Tell us about your business and tell us what your comment or question is from our guest. Caller yes, good morning. Ohio as essential because we are in the automotive business. It is a small operation, two full times in threepart times. I am not sure we do receive the loan. I am not sure how they formulated that based off of our 941s for the past year. Of the labor cost that gross and 940 and 941 and state employment and workmens comp. All included in that cost . Guest thank you. In general, that is your 941. It can also be Health Insurance and a few other benefits. I do not believe it is workers comp. Amount in that definition of pay. It is not everything. It is a little tricky because you get an amount based on two and a half months of payroll, but then you only have eight weeks to use it as opposed to 10 weeks you got it based on. I know that is confusing. It is one of the reasons they are looking to extend the time period. Host mike is in madison heights, virginia. Tell us who you work for, what you do and what your question is. Caller i work for a construction company. My question is, these Small Businesses that got these loans to pay the employees what do you do with the companies that are still working, that are still charging customers . Would that not be double dipping for the companies to still be performing work . You still see the remodels out. You still see the Construction Companies charging customers, but the employees, some are only getting 25 a week