Any of you business owners taking part in PPP? (Re: Small business loans)

[Irongrip400]

Lurker, I thought under the PPP from what I read, is rent and utilities was in the monthly expense, but that portion had to be paid back and the payroll didn’t. I don’t know for sure, and neither does my bank, how this whole thing will work out. I’m hoping for something though. I have a project at my shop that I want to take care of in house if this goes through the way it’s supposed to which will actually make me money if the loan/money is forgiven the way they say it will be.

[LurkerNoMore]

Lurker, I thought under the PPP from what I read, is rent and utilities was in the monthly expense, but that portion had to be paid back and the payroll didn’t. I don’t know for sure, and neither does my bank, how this whole thing will work out. I’m hoping for something though. I have a project at my shop that I want to take care of in house if this goes through the way it’s supposed to which will actually make me money if the loan/money is forgiven the way they say it will be.

Yes, I have read it that way.  Then I have read it just the other way as well.  That the 25% not used on payroll had to be paid back - it seems every body has an idea of what it is, but nobody has the same idea.  We won't know until the applications actually become available and we can read the fine print ourselves.

We went to three different banks and got told three different things.

[SOMEPARTS]

They haven't exactly put all the info out there yet in my opinion.  Just as an example, there is a little deli on the beach that I order from sometimes.  He has a total of 8 employees to cover the opening hours each week.  (this is a walk up to-go spot, so there is no dining and therefore no tips for servers).  He is open 10am to 6pm, with 1 hr prior to opening for prep and 1 hr after closing for cleaning.  That is 10 hours a day, 7 days a week, for a total of 70 hours.  His employees average 20 hours a week at $15 an hour.  That is $2400 per week for payroll.  By the guideline listed above as the PPP is supposed to be determined at 2.5x your monthly payroll and 75% of the amount should be used towards employees, he would qualify for $60,000 under the PPP and $45,000.00 of that would be set aside for paying his employees slightly less than they would have been making each week anyway.  That only leaves him $15,000 to pay other things like utilities, inventory costs and resupply (as he has given away most of his inventory now as fresh food spoils quickly), his beverage license, rent, liability insurance, etc...     His rent is $14,000 a month.  His rent to cover those 10 weeks that the PPP is established towards would be $35,000.

So he could get the PPP loan, pay his employees, use the 25% left over towards his rent and after 10 weeks, still be $26,250.00 in the hole with rent alone (not counting monthly utilities and licenses).  And then what?  There is no promise that anyone is going to be open in 10 weeks.  People are now saying late July.  So what does he do?  Hope another PPP loan comes through and put him further in the hole?

Or... he could not get the PPP loan, let UE pay his employees as it is supposed to do, and wait for things to reopen?

14k for rent blows the whole idea up. He'd be far ahead to just tell the landlord he's not paying for a couple months and let his employees go on UE(assuming he actually claims any of them as employees).

Chances are after this NOBODY will be fighting for his location and his landlord should be smart enough to know that a bird in hand is a wise move.

[theworm]

I’m still thinking about it. The PPP is mostly made for the employee. 75% of the money has to go to payroll while your business is closed. 25% has to go to rent and utilities. You have to spend the money in 2 months to get the loan forgiven.
My employees are all collecting Unemployment insurance and they are happy with it. I don’t want to take a chance on the loan not being forgiven. I’ll have to pay out all that payroll.
If you’re wondering how much the loan will be, take your average monthly payroll expenses and times it by 2.5

Know how much unemployment insurance will increase if your workers claim it?  Average 4-7k per employee over 3 years ... that’s why I’m doing the loan.  If it’s not forgiven it’s 1% interest rate