#44 Everything You Need To Know About The SBA Loan & PPP for COVID-19!

Show Notes

MAJOR updates on the SBA Loan and PPP! Applications are being processed...check out what we have learned! We also share information on the economic injury disaster loan (EIDL).

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This transcript is unedited. The following is a Simpronto media production leaders. Real life leaders. Hey, guys, I am so excited because I've got two amazing people with me today. We are gonna be talking about the PPP. And if you don't know what the BPP is, then you need to stay tuned to this because it's super important. So there's been some major changes since our last call. And now that the application process is open, we wanted to give you some information on some of the things we found. So I've got Heather Remick here, who is just a genius on this topic at this point, and she's done so much research on it. And I'm also joined today by my accountant, Maria Ryk, as she has even more knowledge about all this. So let's get started and let's ask a few questions. And you can hear the rest of this. We're going to talk about it a little bit, but download our podcast, the Real Life Leadership Podcast. It's called Real Life Leadership. And so let's first talk about let's update everyone just a little. If you didn't listen to our last show on this, Heather, give everyone just a little update on what we talked about last time and then we'll dove in with what the changes are. Perfect. So basically the P P P is the paycheck protection plan. And this is basically part of the two Trillion Dollar Cares Act that the government passed and it is basically allowing money. There was three hundred and nineteen billion dollars set aside just for this particular program to help people who are not able to pay their employees during this time. So basically what you're allowed to do is calculate in just a nutshell calculate your payroll cost, which includes benefits that you pay them taxes like different types of taxes, et cetera. And then average that to get an average monthly cost based on what you paid in twenty nineteen and then you're able to apply for two point five times that amount. So just as a basic example, if your average payroll for the month was ten thousand dollars, you could that would be ten thousand times two point five. That means you could apply for twenty five thousand dollars and you're able to use this money once you are approved over the next eight weeks to pay your payroll expenses and then you can use a little bit of it also for rent on base spaces that you might lease on utilities if you own a building. The interest that you pay on that mortgage. And basically, if you use it in accordance with the plan, meaning you're using at least seventy five percent of or more for payroll. On the cost and then the little bit of leftover you could use for utilities and stuff. As long as you do that, then it can be 100 percent forgiven. So it is an really awesome plan that they've done for small businesses. So this is any business that's less than five hundred people. There's a few exceptions to it. Like if you're in the restaurant world, it gives you some exclusions that it would be like five hundred people per location, et cetera. But, you know, you can look all those up on SBA dot gov. And then it's also going to be rolling out four independent contractors and people like that. That's coming up soon, too. So that was kind of an analogy. I want to mention that there's also the E I D L loan, which is economic injury, disaster loan, and that's where you can get an advance up to ten thousand dollars within three days of application of being approved. But right now, the only the ten thousand dollars is forgivable. The rest of it is as a at a business loan. And that's a little bit higher. It's like three point something. Do you guys remember what it is? Maria, do you remember what that three point about seven point three point seven, five percent for businesses and two point seventy five or non profits? Right. And so the ten thousand is forgivable. The rest is a business loan that will have to be repaid unless some future Congress, you know, Congress act forgives it, but it gives you a much higher loan amount than the BPP. But again, here's the big kicker. You can't do both. You can do one or the other, but you can't do both. And I know already I've I've known some people we personally know have some friends that have said, oh, I'm doing both. You can't. Right. Yes, that's correct. Yeah. You have to choose. You can't get the ten thousand advance and that can be rolled into the TPP if that's the one you choose. But you do have to choose. You cannot develop. OK. So let's talk about the guidelines. So last week we when we talked about this, we were being told in the initial guidelines that they were at a point five percent interest. But when the final guidelines came out, surprise, it increased to a 1 percent interest rate, which one percent is still really good. But it did increase and they kept it the same with two year term in the first six months. You don't have to pay, but the interest does accrue during that time. So I want to talk about the interest rate accruing and I want to give some real life examples of what that means. So let's give some examples of what that is. And let's talk about because sometimes people don't understand compound interest and how that works. So who wants to talk about that? Maria, do you want me to. Yeah. So far, the emerging nation, the way that works when you get to land with a bank, it's a little different. So they're gonna take your interest rate. They're gonna calculate about and they're gonna put that across the loan. But it's not a flat fee. So you can just say 1 percent of the loan and then divide it by 12. If it's your loan or by twenty four, it's a two year loan, you're gonna actually have to do it by an AMR's Asian schedule. You can find that's on Bankrate dot com. That's a good one. Has a lot of good calculators on there that make an average dot com. For those of you who didn't hear that, it's bank rate, dot com. But but let's do this. Maria, let's give them an example. At least it's not gonna be exact. Well, let's pretend for easy math. Let's say someone borrows six hundred thousand dollars. And that's how much they decide to do for the P P P plan. Yeah. So if you were to do six hundred thousand you would calculate that out under the improvisation schedule that actually ends up being. So, for example, say your payments started in May. You're going to have where a certain amount of it's going to go towards the principal, the interest just like a normal loan, but you're going to have interest heavy upfront. So they're going to make sure that they get a bigger piece of the interest on the first payments. And that scenario that you gave, like they're probably going to take something like. Well, if you take six thousand, if you take six hundred thousand and you multiply it by 1 percent. Now, again, I'm simplifying this, but again, thousand times one percent. That is six thousand. If you take six thousand, you divide it by twelve. That's approximately five hundred dollars per month that you're paying. For interest. But it's not that simple. Because like you said, they're taking that money and they're wanting to get more of the interest. It's just like any loan that you take. Most of the time, the loan in the very beginning, they're taking more interest in the beginning and then dividing it out. It's compound interest. Yes. So it's gonna be higher interest upfront and less principal. Now, that being said, I have heard that they're excluding where you can make extra payments or anything towards the principal, but it is definitely going to be. The interest is going to be more out front. Well, and the other part that makes it weird is this the fact that you don't have to pay anything for the first six months. There's really no like house loans or car loans that you've ever seen where you say, OK, for six months, you're not paying anything. So that adds to the complication of it. Let's talk a little bit about adding employees back, because I know I've heard people who've said, OK, well, this stinks, right? Maybe they were like, OK, I can't afford right now to pay these employees, so I'm going to lay them off. And now all of a sudden, they're like, well, if the government's going to pay for their them for two months, I'd rather have them back. So now what do they do in that scenario if they've already laid these people off and now they will they're like, I rather have someone for those eight weeks. Yeah. So and we always preface this with saying obviously it's changed since we told you some. Well, we learned last week. And so none of us are experts at this. You should always reach out to your CPA is in your H.R. attorneys on any of this. But what we understand it to be is within the application, you're going to state how many employees you had. As of February 15th. And so if you have less than that right now, you can bring those employees back. You're able to bring them back at whatever rate you need to. So you could bring them back at the exact same pay rate if you need to bring them back at a reduced pay rate or if you want to bring it back at a higher pay rates. Totally. It's kind of up to you. If you had if they had like they were let go of and you like off board of them, if you're bringing them back on re onboarding them, if they're with you as of today or they're still on your payroll, then you have to keep them at the exact same salary you. You can decrease their salary if you needed to, but that's going to affect your forgiveness. So there's two kind of different scenarios here from what I understand. And then I'll let Maria correct me if I'm if I'm misunderstanding it. Basically, if they're not employed with you right now, like you let them go. You fired them, laid them off. They're off, boarded them. And you want to bring them back. You can bring them back at any pay rate that you want. Your re onboarding them as a new employee if they're currently on your payroll and you have to for some reason reduce their payroll, if you reduce it past a certain percent, then that will affect your forgiveness because part of the forgiveness is that you're keeping your exact same number of employees, meaning you're able to maintain your employer base. And this is helping continue to have people have jobs. That's the whole purpose of this throughout this next eight week period and that you're not reducing their salary and giving it to someone else or giving it to yourself that you're continuing to keep them at their same period for the people who are currently with you. And as long as you do that, then you're eligible for forgiveness when you start to either get rid of people or reduce their payroll, that affects your forgiveness percentage. Maria, you want to add anything to that or again. So the biggest part is you want to keep a consistency because that's what they're using as your basis. So at the time of getting the loan, what's your approved for is based on that amount of employees and the amount of payroll. And if you start messing with that, you can do that. You can reduce either the employees or the pay. Each of those corresponding up to 25 percent. But again, even a small reduction, you could be messing with what's forgivable because they're only going by what they know today. So that changes to any degree here. They say 10 percent. If they say fifteen or nothing, it could change. So it's best to say this is what I can stick with. Get the let's stick with that. And then that way, you know that you're in that line to get it forgiven. Well, we also need to talk about some people might say, I don't want those people back. The people that they fire, they might have let go of them because they had a bad attitude. They weren't a good employee. So let's talk about the fact that they actually could hire someone in their place because middle people to think, hey, you're handcuffed. Listen, I can tell you right now, my patience level, if you were if you earn a level employee, I'm going to die on the vine to keep you if you want to be slack off. If you want to have a bad attitude, this is not the time gang guy. I'm not putting up with that right now. Like wash your hands. Like if you say you're gone, you're out of here. I need. Players, and that's what so let's talk about that real quick. Yeah, sure. Go ahead. Go ahead, Maria. Nothing like that is true. If you brought someone to replace, they're not saying it has to be the same. It just has to be when you get the loan. Whatever your say, you get the twenty five thousand. I think that was the scenario you use earlier, Heather, than in that scenario. That's the people you'd have to replace as that twenty five thousand payroll. So you'd have to maintain that if you want that portion forgiven. They talk about the number of employees. So you would look at what were your number of employees on what was the date? February what, 15th, 15th, February 15th? You'd look at what the total number of employees were. So let's say you had 40 employees starting February 15th. Then they're going to look at how many employees do you have after this? Eight weeks is up. Correct. So from what I understand is once you made application and you get the loan, you. Let's talk about the payroll cost. OK. There was a little change in what was in the full cost because that did change in some of the calculations, right? It did. It did. Yeah. Actually, in our our payroll provider, we have one of the biggest ones like in the country. Yeah. ADP. And they had to like re push out reporting because what they'd originally set up changed in the final hours of the final decree. So it did change to basically what we told you last time was that your payroll cost, which is the amount you're allowed to stay. That's the monthly amount that is kind of basing off us was allowed to include salaries, insurance premiums, your state and local taxes. And like any type of benefits, you give them paid time off that you've paid. I'm stuff like that. And but the salary part was the capped at one hundred thousand. So if somebody made one hundred twenty thousand, you could only claim one hundred thousand their salary. Well what changed was that one hundred thousand cap now included all of their benefits. So that included paid time off, that included the taxes you pay on them, that included your insurance premiums on them. So you could have now had where it was from, what we understood before the salary capped at one hundred, but you could still include the extras that you paid for them. Now the whole thing capped at one hundred thousand so you could have an employee that you pay an eighty thousand other salary to, but they now well cap over one hundred thousand after you've paid their taxes, after you paid their insurance, after you give them a four one K plan. So we had to go back and manually recalculate what they allowed. Now they did add in some federal taxes that weren't previously included which was Social Security and Medicare or Medicaid. Yes. So basically, you got it. It helped a little bit, but there was some big changes in numbers and what we originally were seeing, which could have been a loan amount versus what it ended up being. So it wasn't necessarily just these people make over $100000 salary. It's these people make over a hundred thousand total benefits, taxes out the door package that didn't make a difference in what we were allowed to calculate as our monthly payroll cost times the 2.5. All right. And for sole proprietors and independent contractors. Yours are wages, commissions, income or net earnings, right? Those are capital. Those are capped at one hundred thousand. Same. So let's. What I'd like to do is talk about applications. What have you seen. By going through those like some of the different things. I know one thing that you said, Maria, that was really important. And I'd like you to share with everyone. Is that talk about the SBA guidelines versus, say, SunTrust guidelines or Chase's lunch guidelines? Because that is very important. Can you tell me? Sure. So the biggest thing to keep in mind there is SBA guidelines, government guidelines that were released and they're very clean cut. It supposed to be a streamlined program, very easy for small biz businesses to qualify with. And they were under the 500 employee was the easiest one. That was the first option. There's a bunch of other options, too, on the application. But that's one that applies to miss our small businesses. The other side was you had to have payroll, so obviously you'd have to be running payroll. So if you're someone who's never ran payroll, you wouldn't qualify for this particular program right now. But that being said, from there, it kind of gives in to bankers world once it gets handed over to the bankers. So they might have additional guidelines. The Korten thing, I guess to keep in mind with this product, it is no personal guarantee and there's no credit check. So for those of you that maybe have tried business lending and then declined or understand how business lending works, most of the time they want the owner to have a personal guarantee. And most in time, they're going to want to check the owner's credit worthiness. They're going to pull your credit score there, right. Do that. That's different. This loan, they don't. They're not required to do that. That's not part of the loan. So they're going solely off of a person's payroll. The reason that this makes a big deal with the banks mainly is because now a bank has to take a risk that not only is this person. Yes. You're giving them payroll figures from two and 19 or even a couple of months ago. But now they're at a period where they have to decide if you're going to keep the payroll, you're going to make it where they're going to get forgiven. If it's forgiven. They get paid by the government. If it's not forgiven. Meaning you spend it on something else. Ah, you can't prove that you kept payroll. You get getting rehire the people. You didn't meet the obligation. It turns into a bank loan at that 1 percent under their terms, under their day rates. And suddenly now that banks agreed to give you a leg with no personal guarantee and no credit check. So as you can see, that's caused a big conundrum for banks because banks are more you know, that's not their conservative nature. They want to have a guarantee they're going to get paid back. And the portion that turns into a loan if it's not forgiven. The government is not backing that portion. That's the bank who backs that. So it turns into a loan and they're responsible at that point. They've not received some of the stuff that they've always done in the past. So it is making an a little bit different. As far as the lending and what you're gonna counter, each bank is going to have their own rules because essentially they're trying to screen out the people who might not use this appropriately. You might. Maybe they're going to get the money and maybe their business is going to go under. You know, they're trying to rule out the people that can be risky. So they're going to be more likely to go with kind of the steadfast like somebody who's been around a long time. Once, you know, they're they're just going to scrutinize it a lot harder. Now, that doesn't mean that you're excluded from the program. You still qualify. You can still get it. It just means that you might not be able to get it to your traditional bank. It might be that you need to seek out just an SBA lender on the general market if your bank is declining you. Hey, guys, I want to take a minute real quick to tell you about this retreat that I'm putting together. It's going to be just 10 lucky people that I'm going to select and we are going to stay in a five star resort in Miami. And it's going to be pamper time. But the most important thing, I'm going to open up my books. I'm going to show you everything. You're going to leave there with my word docs. You're going to leave with us. We drive with all the information that I've possibly done, every system in place. A lot of times you go to these conferences, you know, you get all jazzed up, but you don't walk away with anything. You're going to walk away with this retreat with tons of systems. Go to Chantel Ray dot com slash retreat to learn more, calling all entrepreneurs, leaders and business owners. Are you looking to grow and scale your business to help more people increase your profits and build the business of your dreams than you need to attend the growing scale? Now summit a free virtual event where you can learn from top leaders and thinkers who have grown and scaled their businesses by the millions. Unlock your potential and discover. Seekers to take your business to the next level. Click the link on the shadows to clean your free ticket. Oh, here we go. My name is Laura and I own a counseling company and I have two people that work for me, but they are ten ninety nine. What do I do? Will I be. I do have my own S-Corp. Can I use the P for my 10 99s? So basically the the answer to that is the 10 99s are going to be able to apply for them their own. And we're there. We're being told April 10th that we all know that our April 3rd deadline or open date was not April 3rd. They weren't ready yet. And it was really like fourth, fifth, sixth really for a lot of banks. And so there I would expect it not to go live on Friday. I would hope B hope that it does, but they'll be able to get their own. So if so, if Laura pays herself a salary as a business owner and she runs payroll, then she can do PPV for herself, but she cannot do it for her independent contractors. They will get to do that for themselves. What other advice do you have for those independent contractors? Maria, have you seen a lot on the what they're going to be allowed to do so I don't know the caps of the actual amount that they've been. They haven't really release that information or made it exactly clear how they're going to calculate. My understanding is that it's going to be something that's supposed to help them get through this time. I just don't know if it's going to be as high as the 10000 more like I don't know if it's going to go on what they're being paid. They've not really released those figures yet to know how it's being calculated. We just know something's coming. And I've also been told it's not only for just tonight, but also like freelancers and people that underwrite this and like haven't taken a payroll. So it's supposed to be something that supplements all these other people that didn't qualify. So I have a question here from Katie Redford, it says, What if you. What if you're an S-Corp and take draws from your business? How does this work? You're saying no, no. That does not count. Those are unfortunately, those are considered equity draw. So basically, at the end of the year, when you claim your total equity, your kedl profit. That's the money you took throughout the year. Or it should be sitting your bank account, one or the other. So. But that's what that money equates to. Now, that being said, I have heard that this new program that I'm kind of rolling out for the subcontractors will include something for owners that just take owners drawers that they've not released any details. They've not really been clear on how that would be calculated. So right now, my small businesses that they just take under drawers were not sure how that's going to look right now. They need to actually run it through a payroll service to be able to claim anything right now, whether it be you had a S-Corp and she was an employee, even though even if you're the only employee of your business owner and an employee, then you could you could get it for yourself as the employee. But not ever you. Yes. For whatever you pay yourself through payroll. So you'd figure out your payroll if you gave yourself fifteen hundred dollars a month, you would take that. You would take that times two and a half, and then you would put that in. Yeah. And you fail to include any like taxes you pay on yourself or if you give yourself a retirement plan, anything like that you can add in. But it has to be run through some type of payroll service. So let's talk about I know, Heather, you filled out the form for our company. Talk about some really important things people need to make sure that they do when they're filling out their form. Yes, sir. The actual SBA application is very simple. It's only like four pages and almost two of them are nothing but disclaimers like saying, I agree to this. I agree to that. I agree to this. I agree to that. It's really simple. I mean, you just put your company's information in, meaning your like what kind of are you an S corp? Are you an LLC? You know, you have to tell that you give your tax I.D., you give your principal place of business. You have to fill out your ownership interest. Anyone who owns over 51 percent, you have to list them on their and how much they own in their particular information, like their Social Security number, just so they have all of that. And then you it literally is so simple. It just asked for your your monthly average payroll. It did and had times two point five and had a box. You filled that in and it said number of employees. And other than that, I mean, you filled out a couple of you answer some questions like the people that you're paying are residents of the United States. That's a requirement. You know, there was a couple other things as far as the SBA application that was pretty straightforward and simple. Then you get into your actual lending application. And so, for instance, in our lending application, I had to put the owner's name like 12 times. And like, for instance, I forgot one letter on it one. So I had to go back and redo the whole thing again. The amount you have to put down, I had to put in like three to four times. If you're not detail oriented, I'm going to tell you right now, do not pass. Go, do not collect $200. Get someone to do it for you or do it with them. That's extraordinarily detailed because if you accidentally missed one number on there, you're not going to get approved. Let's talk about how soon people are getting approved for this. So let's say you turn it in today. What are they telling you that you're probably going to? How long does it take to get approved? And then from there, how long does it take to get the money? So what I've been told is that SBA are actually assigning loan numbers pretty quickly right now. And they've had people like if if you process your application this morning, you may have an SBA loan number as early as this afternoon or tomorrow. Once you have the loan, SBA application number, then the banks can start to process the money. And then we're hearing that once you have your loan number assigned, you could see the proceeds in your checking account within the week. So they are trying to get this money out to you as quickly as possible because, you know, the economy really needs it right now. So we're seeing it that quickly. At least that's what I'm hearing. Are you hearing anything differently or is that about what you're hearing, Maria? Yeah. I mean, I would just kind of poorly say with that. It depends on the bank. And it depends on how they're handling the transactions. If they're open, if they're sitting on loans, if they're actually processing, there is a key difference between that. There are some banks that have said that they're taking applications. But actually on the back side, we've heard they're not doing anything with them yet. They're going to wait to see how this plays out a couple of days, which means that she might have been essentially think you've applied, but it might not be going anywhere quite yet. So I would say with a timeframe like patience is probably key. As with anything with the government, unfortunately. And I say, yeah. But generally it's going to come always on a timeframe that's a little delayed. And also just I mean, I think they broke the Internet when it initially went out like on Saturday. And so I know like Doc Steinberg yesterday, because so many people are trying to sign. So there is a lot of people applying and this is a first come first serve basis loans. So if you're thinking about it, don't think anymore. Like you need to get in contact with an SBA lender and apply because you don't want to wait till you know it's too late because the money will run out. There's a lot of small businesses that need help and that are going to be able to benefit from this. So just be patient, but really stay in contact with your commercial banker like Maria said, or your lender and have make sure you have a great relationship and they're honest with you about whether or not they're processing your application or kind of letting it sit there. So I do have a question that someone's asking. This is from Shanda Harris. It says, Are there banks and resources that will process a loan if your current bank isn't processing or you're way down the line? That's a great question. Yeah, I actually so personally for my clients, I'm at my firm. I reached out. I have over a couple hundred business clients that I deal with at my firm. I reached out a couple of weeks ago to a business lender. I've known a really long time. He specializes in SBA lending, which means he's a broker, and so he has several banks that he works with and he's been a resource to my clients and he's actually getting them applied, getting them through the system. And there's been many that their banks have said, you know, we're not lending any more. I know I've heard from several people. Some of the big banks are completely done because and Bank of America is already maxed out. Yeah. So that being said, when they say they're done, just so that everybody understands, that doesn't mean all the funds are gone and you're not going to get your loan. It means that one of the things they did and I will have to say it was I feel it's a smart thing. The big banks, they cap them at like 10 billion. So even though there's 300 and some billion, they can only do 10 billion. Which means that each bank gets a chance. So you don't have these big house banks going and taking all this money for bigger businesses that just are under just under maybe the five hundred employees and then nobody in the small world gets it. That being said, your bank might say to you they are out of money and they're not lending money. That doesn't mean the programs dried up. It just means that specific bank has hit their cap and they cannot lend anymore, which means you have to go somewhere else. And that's where you're going to see most of these SBA lenders. They're the ones that traditionally people don't think of. Everyone thinks that their bank, when you think of lending, but SBA lenders, they've been in the market a very long time and that's what they specialize in. There's quite a few like fund original different ones that are huge. And that's all they do. They've been doing that for years. They're your guys contact. And I do want to give a shout out my name, Dale Schurman. Which Chase? And if you reach out to me, I can get you his contact information. But I will tell you, he has really just bent over backwards for us. He was like, you're one of the you're the first person we're calling. I mean, just Saturday contacted us. Sunday contacted us. I mean, just really over the top customer service. And I know where it could and where it could. People so people are going to say, OK, well, great, how do I find an SBA lenders there, a place they can go and see who are who are registered as SBA lenders? Because I know they have to be approved by the government. Do they just go to SBA dot gov? You can go on there, put in a zip code. I will say that right now, too. So a lot of the lending industry in general, there's big backers on the back part. So if you put it in right now, you're probably going to get all the banks that are near you. And quite frankly, if you've not already gotten your foot in the door, the big banks, and by today you're getting your foot in the door, you're probably going to have to start going somewhere else to look. Now, I will say a lot of the credit unions are going to have a lot of funds because they're not is overwhelmed. And a lot of banks that are considered traditionally the big you know, the big ones like Wells Fargo, McNamara, the big that is they're going to have funds because people aren't kind of knock on their door down. My guy's name is Chris Snyder. He's with Capital Atlantic and he's been great. He calls me every morning at least three or four times every single day for the last week and a half, giving me updates. So that's how I know how much what's going on besides the IRS updates that I get. But yeah, he's been very helpful, but he deals with SBA lenders in general. And as most people don't know most the time, when you get a SBA loan, you don't get it from a traditional bank when you get an SBA loan. The old way they put you in the system and these SBA lenders that have specialized this for years and years and years, that's you can't catch you. So it's not a Bank of America. It's not Wells Fargo. It's none of these banks that give you that. It's a it's these guys, these other guys. And that's why that's where it's probably going to end up, where most people are going to have to get it. Get it. Awesome. What other last minute thoughts do you ladies have? Try to jog your brain, any other things that people have been asking you, questions that, you know, people are saying, you know, anything you can think of? I think one thing is, is, you know, people may be wondering, well, what if I have leftover money after I paid all my payroll expenses and I use the maximum amount for utilities and rent, but I still have some money left over. What am I able to do with that? And at that point, from what I understand, is it's a loan and you can either prepay it back and there's no prepayment penalties on this this particular loan. So you could just give it back minus whatever interest you've incurred over the you know, if you only keep it eight weeks or 12 weeks, whatever, you'd have to pay that little bit of interest back. But I also understand that, you know, it's after your forgiveness has been, you know, kind of determined. It's it is money loan that you could use for your business, like if you wanted to use it on business, mortgage payments or whatever you might want to use that extra. You're just gonna have to pay it back by the two year term at the 1 percent interest rate. And so I've had I've seen that question a little bit like what happens with the extra money I get in trouble if I don't use it all. What should I do with it? Yes, said the little amount is on the payroll. And that's how it's all done. But that being said, the forgiveness is based on what you do with it. Technically, if you say you got that, you get the loan and then for something happens and you don't do the payroll, you don't bother. So basically you just got yourself rich alone. So you have the two your terms with the 1 percent. There's not any repercussions for that. I mean, that money can be used for anything from what we've been told. It's literally just then you're allowed. You've you've kind of bonked yourself out of getting anything forgiven. You're not going to get nothing forgiven at that point. You know, if you if you go that route. Yeah. So you kind of got to choose like are you gonna take it and use it as a traditional life? And are you gonna take it and actually use it for its purpose? Let's talk about the whole idea. I know this is an extreme case, but let's just pretend because I know people who've had this happen. Let's pretend that your payroll in last year at two thousand nineteen, let's say, was just for easy math, was two hundred thousand per month. And let's say, you know, over the course of the year you've just been cutting payroll and now your average monthly payroll is only one hundred thousand dollars. What would someone do in that case. Would they take the monthly amount of the two hundred thousand dollars. Multiply that by two and a half. Or would they take the current amount times two and a half and discuss that and talk about how banks are dealing with that as well? So from what I understand is you can take up to. So it's it like any like any loan you can take up to what you're twenty 19 average payroll was times two point five. So if it was much higher in twenty nineteen you can take up to that allowable amount. That's what you can request. You don't have to request the whole amount. You could request a lesser amount because from what I understand, if you want it completely forgiven and you don't want to have to pay any interest on it, then you're going to want to shoot closer to what you're actually going to use it for. If you take the larger amount than you can use it for other things or pay it back, you just have to pay interest on it and or the full loan amount. So it's kind of like up to you as to how you decide to do it. Some banks are not allowing you or they're being more strict on allowing for the bigger one because they put in guidelines because that is riskier than because you're in what you're now taking it, whereas a loan, then the forgiveness. And like Maria explained earlier, they're taking a risk on you with no credit check, no personal guarantee. And some of them are just there being more strict. They're only wanting to get forgiveable amounts so that they're not really on the line for $10 billion worth of loans. They just loaned out to people who they don't know what their credit is for mom. So that's what I got from it. Maria might have a different perspective. Yeah, that's exactly right. Yeah. Now, I will see if you're a new business. Say you don't have like a whole tech 2019. You don't have that history. You can use January 1st, February, the end of February. You can use that as your average to and still qualify for the loan. If you had cable during this month, because I know some people might be like, I just got my business off the ground and then this happened. So you can use that. But it's just like you said, Heather, basically, you have to make the choice when you take this money and what you spend it on is going to depend if it's forgiven or not. And I'll be honest, the banks scrutinizing that because it does have a big deal to do with how they're qualifying people. And off of that, just to be said, something that's probably important to mention, just because the bank declines you doesn't mean you don't qualify for the program. You can still get declined by your bank and go to one of these other lenders and get qualified if they decide that they want to take the risk. It really is going to be a risk factor. That's going to come more into play at a certain point with these, because there's going to be a bunch of funds left once the big banks cap out what they're allowed and then someone's going to have to make a decision if they're OK with letting that money go. And my understanding is the big banks are not going to get back more money right now. So whatever they were capped at right now, they're done when they spend that. So it is going to. You're stuck with the other. It's a crazy time ran. You guys are so brilliant. Thank you for all your wisdom on this show today. We really appreciate it. And if you guys have a question on this, e-mail us. We'd love to hear from you. Bye bye for now. Thanks for listening to this episode of Real Life Leadership. If you'd like to get the show notes or access more resources, log on to real life leaders dot com slash podcast and get the show notes from this episode and any other resources you might have mentioned. And also, we'd love to hear from you. Be sure to review or write this podcast on Apple podcast to help spread the word. And if you have any leadership questions you want answered email podcast at Real Life Leaders QCOM.

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