FACEBOOK LIVE EVENT THIS WEEK
Please join me for my Facebook Live event:
Tuesday 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.
PPP loan forgiveness strategies
For those of you who were fortunate enough to receive a PPP loan, the clock has started ticking to qualify to have the loan forgiven. As a reminder, you must use at least 75% of your PPP funds on “payroll expenses” (salary, wages, commissions, group health insurance, retirement) and the other 25% can be used for rent and utilities.
Be certain to:
- Create and maintain a “paper trail” of your expenditures; in other words, make sure you can document each and every forgiveable expense
- Either create a new checking account for your PPP expenditures or keep a very detailed ledger—even if you are working with a bookkeeper or accountant
- If you are self-employed, write out a physical check as payroll to yourself each week—do not just transfer funds between accounts or withdraw cash
- Write down the date the PPP funds hit your bank account and the date eight weeks later—so you are constantly aware of the time period for expending the funds
Remember: while you must pay at least 75% on payroll expenses—and you cannot lessen the salary or hours of a personnel slot—it is my understanding that you do not need the individual worker to perform the same tasks nor do you need to have the exact same individual in that job. In other words:
You can use employees to do new/different tasks. For example, if your business is not yet fully functioning, you could have employees learn how to do social media marketing for you, or help you build your mailing list, or reorganize your inventory/office (if you’re allowed to be open).
If you have received a PPP loan, but you either do not have the demand to put all of your employees back to work and/or your employees are better off receiving unemployment benefits, please share with me your strategies and approaches. I want to hear from you! Send me your suggestions at firstname.lastname@example.org
Later this week: In my USA Today column, I’ll be discussing other fixes I suggest to make the PPP forgiveness provisions more realistic for the situation of many small businesses. I’ll share those suggestions with you.
AICPA calls for improved PPP forgiveness guidelines
The American Institute of CPA’s (AICPA), the nation’s leading organization representing accountants, have called on the Treasury Department and SBA to both clarify and modify the rules regarding forgiveness of PPP loans. In particular, a couple of their requests would serve to better fit the reality of America’s small businesses:
- The 8-week covered period under PPP should align with the beginning of a pay period, not the date loan proceeds are received.
- The 8-week period should commence when restrictions are lifted and the borrower is allowed to operate, not when loan proceeds are received, so small businesses have adequate funds to ramp up operations.
Time to Re-Open? Get Creative
I know you’re eager to re-open your business, but both you and your customers want to be safe. Fortunately, small business owners are creative—some are finding cautious, careful ways to begin to re-open in a limited way. These include:
- “Personalized shopping sessions” – Tracy Kramer Moss, owner of Whimby’s in Santa Clarita, CA is offering 30-minute appointments to her Thrift Shop. Each customer has the store to themselves, and Tracy disinfects surfaces between shoppers.
- Sharing posts of items for sale – Tracy has also asked her other small business owners to post one item for sale in each of their businesses which they’ll all then share in their social feeds to reach each others’ friends and customers. Small businesses unite!
- Appointment shopping – Scheffel’s Toys in Jacksonville, OR has a huge sign in its front window “Call for Appointment”, and I’ve heard of many other stores sending emails to regular customers letting them know that one-on-one appointments are available even when closed.
- A local winery is offering a “Winemaker Dinner” by teaming up with a local restaurant. You can pick up the dinner and a bottle of wine to go from the restaurant, and then the winemaker will join by Zoom to provide tasting notes.
I will discuss all this further during my Facebook Live session—Tuesday, May 5 at 1pm EDT/10am PDT—and in future Facebook Live sessions. 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