The economic stand still resulting from Corona Virus is causing fear, anxiety and in many cases panic. Will your business survive? Will mine? In this episode Jennie Schottmiller joins me to explain our options for supplemental income.
About Jennie Schottmiller
Jennie Schottmiller is a licensed marriage and family therapist (LMFT) and licensed Certified Public Accountant (CPA) in Pennsylvania. She operates a private practice in the suburbs of Philadelphia.
In 2007, Jennie left the accounting world after personal events required focusing on health and family. She pursued helping couples and families and became a therapist in 2010. She opened her private practice in 2016 and came to realize that many of her peers in private practice struggled with accounting, tax, budgeting and cash management issues. Jennie now runs a thriving coaching business, Simple Profit. Simple Profit offers free resources as well as coaching and educational courses to support and empower small business owners.”
I had to close my business because of Corona Virus, now what?
First and foremost. Don’t panic! Do a thorough assessment of your finances, business and personal.
Evaluate which bills are due immediately, which can wait. Do you have loans that are on forbearance?
One of the most difficult things to do is make a decision in a time of crisis. When our emotions are higher, we have less access to the frontal lobe of our brain, the part that makes decisions. We are more in instinct mode. When we do an assessment, more energy is in the frontal lobe to make better decisions.
Overview of Three Programs within the Cares Act
What is the Cares Act
The goal of the Cares Act is to keep people being paid and employed even if they aren’t working during the economic stand still caused by Corona Virus. This will keep businesses going and once the pandemic ends, businesses will be able to open again without having lost rental space, etc. Another goal is to keep people housed, safe and fed during this time.
The Three Programs
If you had to shutter your business and haven’t been able to pay employees, you should direct them to unemployment.
The problem is that the unemployment offices are overwhelmed. Unemployment was, for the first time opened up to self-employed people. Because of the new processes and systems needed for the additional offerings things are back logged.
Partial unemployment is another option for business owners and their employees while still working. Not every state has this, but the government is asking that all states offer it.
2. SBA Disaster loans (EIDL Loans and Grants)
EIDL = Economic Injury Disaster Loan
There are two types of disasters that fall into this category.
Tornado or natural disaster
The EIDL is a one-thousand-dollar grant per employee. They are only looking at your business earnings, not your entire financial status. Meaning, if your spouse is working and providing for the family but you are a business owner, you are eligible. These numbers are determined by your business data prior to the economic stand still.
3. PPP Paycheck Protection Program
These loans go through banks.
Certain banks will only work with you if you have a business account and a business banking relationship.
Some banks are limited with what they can loan. In addition, the banks are confused about the rules of the loans.
This loan looks at payroll costs including employer benefits. For self-employed people it looks at net earnings.
The government wants the majority of this money to go to employees.
Likewise, another requirement is that you maintain your employees. Even if the employee isn’t working, you are paying them and keeping them on as employees.
If the money is used as agreed to for the business, the loan will be forgiven.
All businesses regardless of type, can apply for EIDL or PPP program. If you have employees, you could apply as of April 3rd. If you do not have employees, you can apply April 10th.
Learn more about the options for surviving the economic stand still and connect with Jennie:
To learn more about your host, Robyn Graham, click HERE.
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