COVID CRISIS-REV UPDATE 4
Hello everyone,
Just jumping in to give you the latest I can on what's going on and how to get money to keep yourself and your employees afloat during this unprecedented time.
NEW LOANS PASSED
The two new federal loans that have passed that are as follows:
EIDL-ECONOMIC INJURY DISASTER LOAN https://www.sba.gov/funding-programs/disaster-assistance
This is a loan to cover loss of income due to the Corona Virus crisis. This is an SBA backed loan that is intended to help small businesses, freelancers and Sole Proprietors during this time. Biggest notes on this loan are as follows-
Normal approval processes have been waived to speed up the aid
Collateral requirements are also waived so that you need not have the accounts receivable or cash that is usually required to fund these loans
The interest is capped at 4%
The terms are 10 years but may be extended
This loan has gone from being capped at $350K to 1Million
This loan is NOT guaranteed by the owner, it's a business loan, so the business will be the holder of the note
PAYROLL PROTECTION LOAN https://www.sheppardmullin.com/coronavirus-insights
This is a loan to cover the cost of your payroll during this time and keep employees and business owners paid and off the unemployment system. This SBA backed loan is intended to help small business continue to pay rent and employees during this historic time. Biggest notes on this loan are as follows:
Normal approval processes have been waived to speed up the aid
Collateral requirements are also waived so that you need not have the accounts receivable or cash that is usually required to fund these loans
This loan will be forgiven if you continue to pay your employees during this time (currently through 6/30/2020) There is no penalty for re-hiring someone you already laid off with this loan
This loan has gone from being capped at $5 to 10Million and is equal to no more than 2.5 times your payroll for the SAME PERIOD (2/15-6/30) in 2019
This loan is NOT guaranteed by the owner, it's a business loan, so the business will be the holder of the note
This loan is intended to cover your rent and utilities as well.
I have been unable to find the actual form to fill out for this, but I"m sure it's forthcoming. If anyone has that link please share it with me ASAP.
The City Of Austin is also doing some loans to help cover the time between when these federal programs kick in. https://ibuyaustin.com/austin-city-council-passes-measures-that-assist-businesses-and-residents/
Here too I was unable to find the actual link to a way to apply, so hold tight and send me any info you come across, I will be updating our website as I can with links as they become available (www.revatx.com)
http://austintexas.gov/article/covid-19-community-resources
WHAT CAN I DO ABOUT MY BUSINESS RENT?
Here's a webinar from my business attorney about this subject: https://www.youtube.com/watch?v=aZ2U_B47_RI
The take away from this webinar is to communicate directly with your landlord, and read your lease carefully. We expect a moratorium at the federal level on mortgages and rents which will allow landlords and tenants some breathing room while all of this is going on. Work with your landlord where you can to ensure you don't get booted from your space while you are closed-it doesn't benefit anyone for you to be out of your space during this time, and many landlords are working with folks to keep their leases intact and are expecting some federal relief down the road. The CIty of Austin has placed a moratorium on evictions but again READ YOUR LEASE as some evictions do not require you to go to court, they can simply lock you out.
Similarly, if you have a home mortgage or rent you are worried about, call your lender or landlord.
WHAT SHOULD I DO ABOUT MY EMPLOYEES?
If you can keep them busy then continue to pay them and apply for the above mentioned relief. You may re-hire folks AFTER the relief comes in, so that's one way to continue to help your employees during this time. Failure to use the loans to pay wages may result in having to pay back those loans, so be careful when deciding which package to go for and what kind of cash flow you will have after we return to some sense of normalcy. If you must lay folks off understand that they just passed a provision of this legislation to cover 100% of lost wages.
You will need numbers from us to apply for any of the above mentioned programs. Understand that we are working diligently to get 2020 caught up and make sure we file taxes for folks for 2019 as fast as possible. Katie is on the phone and reading/watching the newest legislation every day to stay on top of what this all means for folks. Please use the online scheduler to book time to talk to Katie https://letmetalktokatie.as.me/ and ensure you actually can speak with her. Please visit our website frequently for updates as well. We appreciate your patience during this time.
We appreciate you all, and we are here for you.
-Katie and the REV ATX team