Bailout / Stimulus Discussion (Hints Missed & Shartz Fired)

Yeah whose bright idea was it to think the banks would want to lend a hand in a world wide crisis. They are the last industry to be called on for help.

Donald J Trump.

I was told our local bank was making a 5% commission for every PPP loan. Our banker certainly seemed pretty eager to get our application in. Here’s how it went for us:

I had sent all our info last night based on the application and guidance they had at the time. Got an email from him around noon today saying that the forms had changed and sent us the new forms, which were about 80% the same. We turned those in after a couple of hours and then got an email from him at 8:30pm asking for a couple of more things, I turned those in quickly and 30 minutes later he said the loan application had been sent for review and approval.

Seems like it may work out for us. Good luck to others and happy to help clarify what we were asked for if anyone wants to know.

In not surprising news, Trump is attempting to get a White House lawyer appointed to be the oversight on the trillion dollar slush fund. 50/50 they actually get confirmed or this is just the wildly partisan pick thrown out there to make the next pick seem more reasonable.

https://www.washingtonpost.com/business/2020/04/03/trump-coronavirus-inspector-general-brian-miller/

Yes, I would love to know exactly what he asked for and what you provided.

Hell, if Chase doesn’t get their shit together the next thing I’m going to ask for is your banker’s contact info. My loan size would also be a 5% commission, I’ll run it through whomever can get it done faster.

Last I heard we were only charging a $100 flat application fee. But there is mass confusion and weekend conference calls…

Here’s the list of documents we had to provide:

  1. Application form filled and signed. One application for each person who owns 20% or more of the business

  2. Filled up Loan calculator spreadsheet that the bank provided with one of the pages signed by each 20% owner

  3. A cover letter (form provided by the bank) that had you list everyone with salaries over $100k for 2019 (among other attestations).

  4. IRS 2019 quarterly payroll reports

  5. 2019 payroll summary: our accountant put together a spreadsheet with all the payroll expenses itemized by employee and by expense. This is one form that the banker later asked us to summarize and give him a spreadsheet with monthly payroll/health benefits/retirement contributions.

  6. 2019 proof of health benefit payments. This was a 12 page scanned document with all our monthly payments to our health insurance plan.

  7. 2019 proof of retirement contributions by employer. Also a large scanned document with all our 2019 receipts.

Finally, we had to write a “(brief-couple sentences) how CoVid has affected your business, how long it will probably to continue to impact you, and what steps/costs you’ve had to undertake to keep operating (or not)”

No information for 2020 was needed, it was all 2019. I hope this helps!

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That is very helpful, thank you. Didn’t know we needed a separate application for each 20% owner, there are only two of us over that percentage so I was able to put both of us on one application, not sure if that will work. One question:

What form did this take? I have a report that we just generated from Quickbooks, but I’m not sure that counts as proof. Apparently (I’m not sure why) we don’t pay health benefits through ADP so that information isn’t going to appear on the ADP payroll reports.

On the one application per owner, it was one of the new requirements given to us yesterday, plus the loan application form had also changed slightly from what it was Thursday.

On the health insurance payments, we scanned the monthly invoices from our health insurer and sent those. Frankly, a quick books page seems more efficient to me, but I guess what we sent was better proof since it comes from a third party.

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Right. I don’t think I have access to all those invoices right now, so I’m going to see if there’s some kind of statement I can get from Anthem. Thanks again, this is really helpful. Just emailed my banker at Chase to say that hearing that other people are getting applications submitted is not making me feel very secure.

You’re welcome, happy to help. I wish I could put you in contact with our banker but we live in different states and this is a small local bank. Good luck!

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Don’t worry all trump said he will get more money because the banks are rocking so hard giving out the money they already allocated.

I wonder how long it’s going to take for the market to react to this obvious clusterfuck. Monday? Mid-week?

My bank had all day conference calls and scrambling with IT today, and is processing applications now (but only for existing customers). Once we approve the loans they go to the SBA for approval, then we can fund. Who knows how long it will take the SBA, seems likely to be weeks given staffing limitations. The regulators are desperate to get these funded to the point of telling the banks to accept the applications at face value and to not worry about policing fraud on the front end.

The article linked above has this in it

Connect One Bank of New Jersey told CNBC Friday that they had processed a loan and deposited it into a customer’s account.

Do you think that’s possible? Or do you think that bank independently judged an applicant to be legit and fronted the money to use the story as a marketing tool?

Since the program is first come, first served, small businesses who applied at lenders who were having trouble with the hastily fashioned relief program run the risk of missing out.

That whole article has made me crazy. The idea that thousands and thousands of applications are getting submitted while I’m sitting here with my dick in my hand because Chase is being careful is NO FUCKING BUENO.

I posted this in Electric Superflu, since I didn’t realize there was a separate bailout thread.

Question for the law bros:

So my understanding is the new legislation allows small businesses to get loans to keep paying their employees and that these loans can be forgiven. I have now heard second hand of separate cases where employer was planning on taking the loans, but still (allegedly) furloughing some of the employees. All this is second hand, so I don’t have a lot of details.

Anyway, what I want to know is what is the mechanism in the bill to prevent this. What sort of enforcement is there. How is a small business owner punished for this if caught?

I suspect that all of this is so new that no one knows. But if someone has an idea, I’d be interested.

The way the rule works is

How much of my loan will be forgiven?
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
You will also owe money if you do not maintain your staff and payroll.
 Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
 Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
 Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

I can tell you that on the application it says

I further certify that the information provided in this application and the information provided in all supporting documents and forms is true and accurate in all material respects. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.

I know that asking for loan forgiveness will be a separate application in the future where presumably the penalties will be the same.

LFS,

Thanks.

To improve my understanding, consider this hypothetical scenario: The business owner’s plan is to just take the cheap money (because cheap money is always good) and then pay back the loan later (i.e., not planning on forgiveness).

Is there anything in the first application that says you have to keep all employees? I’m not even sure how you could promise that as other reasons could come up why the employee is let go or chooses to leave.

Looks to me like you are allowed to furlough employees (during which time they can collect super unemployment benefits), as long as you fully staff back up by June 30.