Federal Stimulus offers loans, grants and forgivable loans

Federal Stimulus offers forgivable loans. These resources offer some clarity and detail on the PPP, the major loan/grant on offer from or backed by the SDA. 

There is good news for businesses that have been waiting to reopen or are only doing so gradually who might have decided the PPP doesn’t work for them.  First the deadline to apply has been extended until August 8th.  With PPP changes enacted June 5th, businesses now have 24 weeks to spend towards forgiveness through December 31st.  That gives you more time to convert the loan to a grant (and more now can be used for overhead versus payroll).  So you might want to reconsider applying for the program and not leave this loan to grant funding on the table. There are some $130 billion still available in the PPP.

1. This article from Forbes points out that while the PPP loans can be almost entirely forgivable, the fine print reveals some limitations. However, the legislation enacted 6/5 now allows 40% of the loan to be used for mortgage interest, rent and utilities and still be forgiven, with the remainder of 60% required to be spent on payroll.  This Forbes article uses a hypothetical business to share tips like what documents to prepare, the fact that the loans have no prepayment penalty, and any amount forgiven will not be taxed.  It also describes what documents to get ready while waiting for a bank and the SBA sort through glitches in program roll-out.
3. The second round of funding dedicates $60 billion for community lenders and credit unions that cater to local businesses. This PPP fact sheet was updated for the second round with clarifications and updates from Treasury as of 5/27. 
5. If you are just now applying, when deciding on a lender consider asking whether it meets those community bank requirements to get priority loans. Also, try to  use a bank where you have a relationship; particularly as a new relationship will require the bank to do a money-laundering screen of partners and managers.  Those loans that closed in the first round appear to be from local banks and because of long-term customer relationships. 
7. If you are interested you should contact an experienced Colorado SBA lender. Feel free also to contact us with suggestions for non-profit lenders with relationships with the SBA and a track record of working with actual small businesses. 
9. You might also check out this compilation from the SBDC provides many more resources, and is updated regularly as more information comes in and programs roll out. 
11. If you have already received a PPP, do you have questions about rehiring or headcount.  For example, do you have to rehire the same employees? Can I reduce compensation of employees and still get forgiveness? What do I do if my employees won’t return to work? How do I meet the headcount requirements (which are now extended to December 31st)? Check out these PPP FAQs on Rehiring Employees with answers to these questions so you can get your full forgiveness.  
13. Last, there is another round of City grant funding available to businesses. Following two successful rounds, there are still funds left for this grant program. The next deadline to apply for these up to $7,500 grants has been extended to July 10th. Apply here, even if you were declined in earlier rounds as more resources have become available.

Back to Brick & Mortar

With the City moving to open more and more businesses over time, we thought you would might want to check out this great resource on how to successfully  reopen safely and instill confidence in employees and customers.  Back to Brick & Mortar Guidebook by Access offers best practices and considerations for businesses, compiled with detailed guidance from experts in public health, real estate strategy, communications, and retail operations.  

&Access, who brought you Back at Brick and Mortar, developed Safety Signage Packages for in-store and outdoor use.  Download yours today here.

EEOC allows COVID-19 workplace testing, and what this means. 

Expanded Outdoor Seating

Speaking of the out-of-doors, interested in outdoor seating for your restaurant or drinking and eating establishment?  We drafted this letter to the Mayor calling for urgency in creating flexible and creative rules for expanded outdoor seating with some 50 restaurants, business districts and industry groups signing on. 

In response to our advocacy, the Colorado Restaurant Association and others, Denver launched a temporary program to expand outdoor seating for restaurants, bars, and similar businesses to allow for greater physical distancing and safety for patrons. You can submit a proposal here for the city to review. The application is straightforward, with considerations to include plans and accommodations for safety, mobility, and local and emergency access. Check out the FAQs for more guidance.

Cheney Bostic of Studio Seed has created a Friendly Business Guide for Outdoor Expansion. If you want to expand your outdoor space for patrons, but aren’t sure where to start – check it out for ideas and examples that may work for your space.

Feel free to contact us at info@westcolfaxbid.org with any questions.  

If you are interested in this and related efforts, please email dshah@westcolfaxbid.org subject line “advocacy”.

Lease & Loan Negotiations

A number of lenders are entertaining loan deferrals, as are landlords re-negotiating leases with short term abatements or concessions in return for an extended term, for example.

Depending on the circumstances, some options include:

• 3 months deferred payment, added to end of lease
• 50% reduction for 3 months
• Interest-only payments, full utilities/CAM fees
• Base rent on reduced revenue-generating square footage (i.e, kitchen only in a restaurant just doing take-out/delivery)

Similarly, property owners and businesses are negotiating with their banks for loan modifications, including:

• Reduced payments
• Interest-only payments
• Loan payment deferrals

Be prepared to demonstrate to your bank how you are being affected by current events and what you’ve done to reduce expenses through salary reductions, staff layoffs, landlord negotiations, vendor and supplier accommodations.

Unemployment

This resource from the Colorado Restaurant Association (but generally applicable to employers in Colorado) goes into the details of unemployment. It includes information on “jobs attached” and “work share” as methods to allow employees to, respectively, more easily collect unemployment compensation but return to payroll, or remain on a reduced payroll while collecting unemployment at the same time. It also has information to share with unemployed employees, and this link has more resources on how they can access a meal.  Finally, note the PPP Fact sheet, question 40 regarding loan forgiveness when efforts to rehire are not successful.