Hey everyone, Chip Brackley here with Archetype Wealth Partners. Over the last week, we've had a number of discussions and questions around the CARES act and some of the other avenues of relief for small business owners being put forth by the government. Since this is happening so fast, we wanted to just put out a quick video with 3 key points to help small businesses navigate the process effectively.
1). Don’t waste time. If you feel your business is in need, I would immediately get on the phone with your banker, CPA or attorney. There are going to be A LOT of applicants and only so many people processing these loans. Don't wait.....get your applications in asap.
2). Before you dive in head first, make sure you Understand the different loans or grants that are available before applying. There are government programs and state programs. If you apply and receive assistance from one program that may prohibit you from receiving assistance from another so you want to make sure you are applying for the correct program for your individual business. Also, not all banks can process these loans and some banks can only process certain size loans. Be proactive and reach out to your banker.
3). I wanted to get into a little more detail on one aspect of the program. Probably the most talked about component of the CARES Act and the one we are getting the most questions on is the PPP or Paycheck Protection Program. This loan is structured for businesses and some non-profits with less than 500 employees as well as sole proprietors. These businesses are eligible to receive 2.5x their payroll for the last 12 months with a cap at $10mm. This is structured as a loan but has forgiveness potential or essentially turns into a grant if used for specific aspects of your business. some of what would qualify for forgiveness would be if the funds were used for payroll, rent, interest on your mortgage or utilities.
Remember this is a brand new program that has a lot of moving parts. It’s important to get this right so make sure you are asking the right questions and doing your homework before applying for the loans. As always, feel free to reach out with any questions.