May 12, 2020
Welcome to the inaugural episode of our new video series, Off the Cuff. My name is Frank Hambalek, and our firm, Wiebe Hinton Hambalek is located in Central California. We specialize in real estate, agricultural, and medium-sized closely-held businesses. As we film this video today on May 12, 2020, the United States is beginning to talk about the reopening of our economy in the midst of this Coronavirus pandemic. First and foremost, I hope all of you who are watching are safe and healthy. This is a scary time for our nation, so hold on tight to your loved ones. We’re thinking of everyone whose health, or the health of a family member has been affected.
Things are changing daily for families, businesses, and the country, so timely and reliable information is more important now than ever before. I hope to bring clarity and tips to you quickly, and off the cuff, as often as I can in the upcoming weeks. You can find my sources and relevant articles on our resource center on our website at whhcpas.com/covid19. To catch future videos, follow us on Facebook and LinkedIn, or sign up on our website for our email newsletter. Today we’re going to touch on a few frequently asked questions.
What is the Paycheck Protection Program?
Now, the Paycheck Protection Program is part of the CARES Act that was signed into law on March 27, 2020. At the height of the pandemic, the economy was starting to suffer due to all the closures of business, so Congress put in place the opportunity for small businesses to apply for and obtain loans through the Small Business Administration. Companies can borrow up to $10 million, must have employees under 500, and the amount of the loan was for average monthly payroll at two and a half times. Upon use of the funds for payroll, utilities, rents, and interest, over the eight weeks after funding, you can apply for forgiveness, and hopefully, have the loan turned into a grant.
What are the EIDL loans?
Well, EIDL loans stand for the Economic Injury Disaster Loan. The CARES Act extended the disaster assistance loan program under the SBA to allow for businesses, for working capital, to borrow up to $2 million to pay for operating expenses but also can apply for an immediate $10,000 grant.
What funds are still available?
The first round of the Paycheck Protection Program was exhausted within two weeks of application, so Congress extended an additional $350 billion in round two. As of today, significant funds are still available under the Paycheck Protection Program.
What is the status of Fresno County, California, and the U.S. in terms of reopening its economy and operating our business?
Currently, the United States has allowed state by state to open at the discretion of the governors. The governor of California has published a four-phase opening with suggested criteria for cities and jurisdictions to consider before loosening the shelter in place. Currently, locally, the mayor and the City of Fresno has allowed for certain businesses who are considered essential to remain open but include social distancing and other mitigation in an effort to keep everybody safe.
At this time, I’m looking forward to an open economy and the opportunity for our businesses, and employers, and employees, to be able to get back to work. We all must be smart and continue to use suggested guidelines for mitigation. The next installment will be out later this week, and we’ll dive deeper into the PPP program, and acquiring, and using, and applying for forgiveness of the funds. Thanks for watching our first video. Until next time, stay healthy.
Other Off the Cuff Episodes:
Off the Cuff – PPP Eight-Week Period and Forgiveness
By Frank Hambalek, CPA
Partner
Frank specializes in high-level consulting and financial reporting work with medium- to large-sized construction and real estate companies. With his talent in managing systems and people, he has served as an outsourced CFO for many clients. Other specialties include internal fraud prevention, GAAP standards, and new leasing standards.
