FACEBOOK LIVE EVENT NEXT WEEK
Please join me for my Facebook Live event:
Tuesday, June 2nd, 1pm EDT/10am PDT
Update on PPP, financing, and strategies to help your business survive. Go here to join or to watch later.
And if someone forwarded you this newsletter, you should sign up here.
MARK YOUR CALENDARS
June 9th I’ll be the guest on a Verizon webinar on Money: how to find it, manage it, make the most of it in the new reality. More info to come.
It’s time for another small business update on the PPP and how these latest developments will affect your small business.
Is Your Eight Weeks Up?
Believe it or not, this Friday marks eight weeks since the first PPP loan applications went live. And, as you probably are aware, eight weeks is the magic number to have the PPP loan “forgiven.”
Super quick reminder about forgiveness in the original guidelines:
- You had 8 weeks from the day you received the funds
- You had to spend at least 75% on payroll costs
- You had to bring your employee level up to pre-pandemic levels
- You could use up to 25% on rent and utilities
Then, the Treasury made a couple of adjustments:
- You could instead start counting the 8 weeks at your first payroll period after you received the funds rather than the day you received the funds
- If you offered a job back to an employee and they refused, they wouldn’t have to count on your employee levels
- You still had to spend the 75% on payroll costs
Potential PPP Legislative Fixes
While Treasury Secretary Mnuchin appears to have had the power to expand the eight-week forgiveness requirement, he has refused to do so without Congressional authority. Fortunately, there is bipartisan support for making some adjustments to the forgiveness provisions.
House Bill: Provide up to 24 weeks to spend the PPP funds and eliminate the 75% payroll requirement
Senate Bill: Provide up to 16 weeks to spend the PPP funds and allow businesses to use some of the funds for safety adaptions and PPE for employees
Legislation may be passed as early as this week—keep your fingers crossed! If it passes, you may have longer to reach the PPP goals for forgiveness.
What to spend money on now
In this Covid-19 environment, managing money is even more critical now for your small business survival. So how should you spend your money now?
- Staying in front of your current customers. You should regularly be sending out email newsletters, posting and boosting on social media, making calls. Offer discounts, weekly specials, sell gift cards, provide delivery. Do what it takes to get them to open their wallets.
- Marketing to prospects. Inevitably, you’re going to lose customers in this environment, so you need new ones too. History has shown that companies who increase their marketing in economic downturns actually increase market share.
- Safety and cleanliness. If you have a place of business, whether a retail store, a restaurant, a factory, an office: cleanliness is job one. Spend money on having employees continually disinfect and provide hand sanitizer and face masks. Require masks on customers for in-person interactions.
- Pivoting. You are almost certainly going to have to make some changes in your business to meet the new realities. Social distancing and some isolation will last for many months, if not years. Spend money necessary to change your business practices to meet the needs of this new world.
I will discuss all this further during my Facebook Live session—Tuesday, June 2nd at 1pm EDT/10am PDT. Go here to join or to watch later. Learn more in future newsletter updates as well. Sign up here if you are not already on my mailing list.
Stay well. Stay home. Stay in business.
Copyright Rhonda Abrams, 2020