In our most recent webinar of May 7, we gave an update on the status of the stimulus offered to small businesses and provided advice for those looking to reopening. For starters, here is a PPP refresher:
- Original round was $349 BILLION; current round is $310 billion, $60 billion earmarked for small lenders; as of 5/3/2020 $175 billion was still available
- In the latest round, 70% of loans are under $50,000, with average loan at $79,000
- Local banks are accepting applications from new customers
UPDATE FROM THE IRS
We have since learned when it comes to the IRS and reporting your taxes next year that whatever PPP money is used to pay for payroll, rent, mortgage interest, and utilities that is forgiven
- You are not allowed to deduct those expenses on your 2020 tax return
- This is frustrating, as the loan forgiveness is not taxable according to the CARES Act, but this IRS notice in effect makes it taxable
- So, the amount forgiven in effect becomes taxable
The PPP is still a good deal—just plan that the forgiven part will be taxable. It’s important to note that since self-employed people are using it to pay themselves a draw, the forgiven portion is not taxable to them. In addition, we can help you calculate your PPP forgiveness. You do not have to go at this alone.
When it comes to SBA Loans note that SBA is making 6 months of payments on all SBA guaranteed loans and they are making payments starting in April. Check with your lender or REDEC if you don’t see this happening (this is also effective for new loans). In the video shared below, we highlight new information on a Chemung County Emergency Relief loan as well as a Steuben County Emergency Relief loan.
Our region is also starting to implement reopening strategies and it is important to know how and when this applies to your small business.
Things to note:
Manufacturing and wholesale supply chain
Select retail using curbside pickup only
Finance and insurance
Real estate and rental leasing
Restaurants and food service
Hotels and accommodations
Arts, entertainment and recreation
Here are some tips to considering reopening:
- Adjust workplace hours and shift design to reduce density in the workplace
- Enact social distancing protocols
- Restrict non-essential travel for employees
- Require all employees and customers to wear masks if in frequent contact with others
- Implement strict cleaning and sanitation standards
- Enact a continuous health screening process for individuals to enter the workplace
- Continue tracing, tracking and reporting of cases
- Develop liability processes
It’s also important to consider repositioning your business, which in part means a fresh look at marketing, messaging and connecting to your customers, for example, a regional commercial cleaning company has many of its largest customers shut down, and in the Phase Four group for re-opening. However, since the business precautions call for “strict cleaning and sanitation standards” the need for their services has never been higher.
WE’RE HERE TO HELP
If you are looking for assistance in planning your repositioning, IncubatorWorks is here to help. We provide one-on-one mentoring to entrepreneurs and small businesses at no charge. We also provide a program called Co.Starters, which provides a structured process for developing your business model, and in particular, how you need to adapt your business model to meet the challenges of re-opening and the new normal.
Next Co.Starters virtual 4 session class to start later in May, if you’re interested contact firstname.lastname@example.org
The video below is the complete webinar on the topics briefly touched on here. We look forward to helping you through this next stage!