My fellow comic shop owners 2 2

[lighthouse]

I applied for the SBA Paycheck Protection earlier today. My understanding is that individual banks are rolling out on their own schedules. Mine happened to be ready before noon eastern (I know some aren’t ready yet at all).

My bank indicated they were processing all account holders first (before taking applications from non-holders). So if at all possible, reach out to the folks you bank with before automatically picking a lender by name.

There’s no risk to the banks for these loans, so they are definitely excited about loaning money. It’s not like a car loan that comes with risk. They’re a middleman collecting an automatic payday and they WANT to loan you money.

Because it was the first few hours, it was an irritating RPG quest. I did the first two pages of a DocuSign portal 47 times before I could progress to the third screen. Even after starting the actual application it crashed out in the middle twice. Sending me back to the beginning again with a blank form. (Though thankfully not to the first screen I faced 47 times. At least it saved that progress). 

The application itself was incredibly easy. I provided my average monthly payroll for 2019, multiplied by 2.5 for the amount I was requesting, initialed all the normal agreements (including the one saying I will buy American whenever possible). Attached my four 941 quarterly reports from 2019. Attached a payroll register as of February 15, 2020. Digitally signed. Done. 

Ignoring computer glitches the whole process took 20 minutes tops (with glitches it was almost 3 hours of aggravation). No other tax forms to add. No personal 1040s (though you would if you’re a sole proprietor). It’s not the giant pile of documents a typical disaster loan requires. Just payroll summaries for 2019 and payroll status as of 2/15/20. That’s it. 

They’ll forgive every dollar you spend on payroll in 60 days after the loan, and up to 25% of that on non-payroll like rent. 

So if your average 2019 payroll was $8000 a month, you’re eligible for a $20,000 loan (2.5x). You can use up to $5,000 of that $20,000 to pay rent or mortgage and still get it forgiven. If you use all $20k on payroll, all forgiven. If you use $15k on payroll and $5k on rent, all forgiven. If you use $10k on payroll and $10k on rent, $15k is forgiven and the other $5k is a 24-month loan at 0.5%. 

It’s as close to free money as you’ll ever get as a small business owner. Just don’t yell at your screen as many times as I did. Or do. It’s kind of cathartic. 

I would hope that EVERY comic shop in the country jumps through these hoops. I know some shops are closing because it was about time to retire anyway, and others because they weren’t ever viable in the first place. But I’d hate to see an extra 200 shops close that wouldn’t have had to if they just completed this simple (if annoying) RPG quest. 

[revat]

thank you for posting this.

best wishes

[Bookery]

I just got my application by email (on a Sunday!) and filled it out.  I didn't have as much difficulty as lighthouse... but there were some major problems.

First, I was able to log on through my bank account, which sped things up.  But they had my business address listed as my home address.  It had an "edit" function, but no matter how many times I tried, it never worked.  Though the information is technically incorrect, I had to stick with it.  Then after filling out several pages it told me my business didn't qualify, and that I would have to call the national banking number next week.  I decided to start over.  This time around it accepted my information, and even had a few things already filled out from my banking info.

At the start of the application, it allows you to request funding for payroll, mortgage interest, and utilities, and you check all of these off.  But as I went through the form all it ever asked for was payroll data.  I thought the rest would come later in the process, but it never did.  Eventually you reach a place where there's no going back.  So I will receive no funds for utilities and interest.  You have to check a box at the end that says you will apply for no further SBA loans through 2020, so there's no going back.  As a sole proprietor, the process allows my employees to get paid, but nothing for me.

I will continue to have to pay utilities out of my own pocket without any funds coming in.  In the next few days, I will also be hit with the 1st quarter's workers' compensation, federal, and state unemployment taxes (plus the accountant fees).  I always keep $10k in emergency backup funds (sudden repairs, etc.) but that won't last long.  I've borrowed some funds from my wife just to have in the account should something else unexpected happen.  When we are able to re-open the store, I have to have funds in place to buy collections.  In my business, which is heavily reliant on collectibles, if you can't purchase collections, it's all over.  

One's moods are like a roller-coaster.  Some days it looks like it might all fall apart, others you look at the same numbers and think it may end up being okay.  Ohio will have been shut down for 6 weeks come May 1.  If this goes on much beyond that, however, it's going to be pretty bleak.  My downtown is almost all comprised of small businesses... antique shops, boutiques, a martial arts studio, costume shops, barbers, hair salons, a yoga studio, a music store, a jewelry store, etc., etc.  All are shut down.  Even the public library.  The bank I use across the street is closed for the lobby... only the drive-thru is open.  The restaurant across from me is closed... not even carry-out.  I wonder how many of these will re-open again.

[lighthouse]

Bookery, they only ask for payroll because that’s the metric they are using to determine the size of loan you qualify for. $4000 a month payroll you can apply for $10,000. $200k a month payroll you can apply for $500k. 

You can still USE the money for payroll, rent/mortgage, and utilities. But they will only forgive up to 25% of the total for things other than payroll. If you borrowed $100k and used $40k on non-payroll, the remaining $15k (excess beyond 25% of the total) becomes a 24-month loan at 0.5% interest.

When it comes time for forgiveness, they’ll need records for the non-payroll stuff (copy of your lease etc). But everyone’s qualification number comes just from the payroll calculation.

[buttock]

On 4/3/2020 at 3:09 PM, lighthouse said:

I applied for the SBA Paycheck Protection earlier today. My understanding is that individual banks are rolling out on their own schedules. Mine happened to be ready before noon eastern (I know some aren’t ready yet at all).

My bank indicated they were processing all account holders first (before taking applications from non-holders). So if at all possible, reach out to the folks you bank with before automatically picking a lender by name.

There’s no risk to the banks for these loans, so they are definitely excited about loaning money. It’s not like a car loan that comes with risk. They’re a middleman collecting an automatic payday and they WANT to loan you money.

Because it was the first few hours, it was an irritating RPG quest. I did the first two pages of a DocuSign portal 47 times before I could progress to the third screen. Even after starting the actual application it crashed out in the middle twice. Sending me back to the beginning again with a blank form. (Though thankfully not to the first screen I faced 47 times. At least it saved that progress). 

The application itself was incredibly easy. I provided my average monthly payroll for 2019, multiplied by 2.5 for the amount I was requesting, initialed all the normal agreements (including the one saying I will buy American whenever possible). Attached my four 941 quarterly reports from 2019. Attached a payroll register as of February 15, 2020. Digitally signed. Done. 

Ignoring computer glitches the whole process took 20 minutes tops (with glitches it was almost 3 hours of aggravation). No other tax forms to add. No personal 1040s (though you would if you’re a sole proprietor). It’s not the giant pile of documents a typical disaster loan requires. Just payroll summaries for 2019 and payroll status as of 2/15/20. That’s it. 

They’ll forgive every dollar you spend on payroll in 60 days after the loan, and up to 25% of that on non-payroll like rent. 

So if your average 2019 payroll was $8000 a month, you’re eligible for a $20,000 loan (2.5x). You can use up to $5,000 of that $20,000 to pay rent or mortgage and still get it forgiven. If you use all $20k on payroll, all forgiven. If you use $15k on payroll and $5k on rent, all forgiven. If you use $10k on payroll and $10k on rent, $15k is forgiven and the other $5k is a 24-month loan at 0.5%. 

It’s as close to free money as you’ll ever get as a small business owner. Just don’t yell at your screen as many times as I did. Or do. It’s kind of cathartic. 

I would hope that EVERY comic shop in the country jumps through these hoops. I know some shops are closing because it was about time to retire anyway, and others because they weren’t ever viable in the first place. But I’d hate to see an extra 200 shops close that wouldn’t have had to if they just completed this simple (if annoying) RPG quest. 

It's not zero risk for the banks.  Loaning out money at 0.5% is a terrible way to tie up capital.  JP Morgan was refusing to participate without clarification last I heard. 

[DavidTheDavid]

As a sole proprietor, I can apply for this, but my bank's site is apparently not working.

[wombat]

5 hours ago, lighthouse said:

Bookery, they only ask for payroll because that’s the metric they are using to determine the size of loan you qualify for. $4000 a month payroll you can apply for $10,000. $200k a month payroll you can apply for $500k. 

You can still USE the money for payroll, rent/mortgage, and utilities. But they will only forgive up to 25% of the total for things other than payroll. If you borrowed $100k and used $40k on non-payroll, the remaining $15k (excess beyond 25% of the total) becomes a 24-month loan at 0.5% interest.

When it comes time for forgiveness, they’ll need records for the non-payroll stuff (copy of your lease etc). But everyone’s qualification number comes just from the payroll calculation.

This is correct from everything I have read. You can use the money for things like rent and utilities, but the calculation for what you receive is based on payroll and that is the reason they give you an extra 25%. 

 

First, it’s worth reviewing the (newly confirmed) nuts and bolts of the program: If you are a company, nonprofit, veterans organization, or tribal concern with 500 or fewer employees — or else, a self-employed individual or independent contractor — the government will provide you with a loan equivalent to eight weeks of your prior average payroll (or, for the self-employed, earnings), plus an additional 25 percent of that sum (unless that grand total adds up to more than $10 million, which is the cap for any individual firm). You do not need to make any payments on that loan for six months. And if you maintain your workforce, then the government will entirely forgive the portion of the loan spent on payroll, benefits, utilities, rent, mortgage payments, or other debts.

[kav]

My LCS buddy reports his bank is not doing the stimulus, no new banks will take him for the loan only established customers.  He is also required to spend 75% on employees but he has 5 employees and they do not consume 75%-his rent does.  It is not working, for him.

[Bookery]

5 hours ago, lighthouse said:

Bookery, they only ask for payroll because that’s the metric they are using to determine the size of loan you qualify for. $4000 a month payroll you can apply for $10,000. $200k a month payroll you can apply for $500k. 

You can still USE the money for payroll, rent/mortgage, and utilities. But they will only forgive up to 25% of the total for things other than payroll. If you borrowed $100k and used $40k on non-payroll, the remaining $15k (excess beyond 25% of the total) becomes a 24-month loan at 0.5% interest.

When it comes time for forgiveness, they’ll need records for the non-payroll stuff (copy of your lease etc). But everyone’s qualification number comes just from the payroll calculation.

I think you're right... but at no point in my application, other than the first question, did this show up.  But on reflection, it's probably coming in a separate email / form.  I know they are going to require payroll documentation, so I suspect I've only filled out part of the application so far.  But it would be nice if that had been made more clear.

[Bookery]

1 minute ago, kav said:

My LCS buddy reports his bank is not doing the stimulus, no new banks will take him for the loan only established customers.  He is also required to spend 75% on employees but he has 5 employees and they do not consume 75%-his rent does.  It is not working, for him.

My mortgage is down to the final 2 years, so it's all principal now anyway, so I don't really care if that's covered.  Utilities being covered would be helpful... but at least this is the lowest-utility part of the year -- warm enough the furnace runs only in the mornings, but not so warm we need a/c yet.  But there are no ventilating windows... so pretty much one or the other is required all year, especially since I can't even open the front door to air things out, as people would wander in off the street thinking I'm open.

[Shrevvy]

17 hours ago, buttock said:

It's not zero risk for the banks.  Loaning out money at 0.5% is a terrible way to tie up capital.  JP Morgan was refusing to participate without clarification last I heard. 

It is near zero risk. Yes, the interest rate is low for the banks, but origination fees start at 5% (declining to 1% for loans over $2 mm). Most loans will be forgiven and paid by the Federal government. Making up to 5% on risk free loans from the government in 3 months is actually quite good. I would think JP Morgan skews to the higher loans and lower origination fees.

Has anyone received funds yet? My wife applied (non-comic biz) on Friday. No funds here yet.

[Point Five]

This is somewhat off-topic to the OP's post, but just saw this from one LCS chain and thought it was a clever solution to raise funds during the downtime... selling packages of perks with extra value to be used when the stores reopen. Not a model that would work for every LCS but might work for some.

https://thirdeyecomics.com/battlebonds/

 

[ThothAmon]

Got my Restaurants application in so early Friday (12:04am) that the bank required a different one when the Treasury tweaked the terms to placate Chase’s concerns. Supposedly my place in line was held. Fantastic free app is ‘genius scan’ that will photograph using phone and translate into pdf or jpeg. Made submitting to my bank super easy. 

[lighthouse]

I have not yet heard a response on my own application, but my bank has already stopped accepting new applications for the time being, due to "unprecedented demand". Their website indicates they are still processing the applications already submitted, but that no new applications (even from existing banking customers) will be accepted. So the first wave of openings didn't last even one business day (Friday morning to Monday morning).

[buttock]

1 hour ago, lighthouse said:

I have not yet heard a response on my own application, but my bank has already stopped accepting new applications for the time being, due to "unprecedented demand". Their website indicates they are still processing the applications already submitted, but that no new applications (even from existing banking customers) will be accepted. So the first wave of openings didn't last even one business day (Friday morning to Monday morning).

$350B is not even one week of US GDP.  I know that's not an exact measure of the need, but it shows how little that actually is.  Anyone who wasn't ready to file the second it opened was destined to miss out. 

[wilbil]

10 minutes ago, buttock said:

$350B is not even one week of US GDP.  I know that's not an exact measure of the need, but it shows how little that actually is.  Anyone who wasn't ready to file the second it opened was destined to miss out. 

doc, round 4 is being discussed as we speak, with a starting level of 750-1 trill, and added incentives for healhcare providers/responders, etc. and as arider to possibly 2 trill for infrastructure.

[buttock]

4 minutes ago, wilbil said:

doc, round 4 is being discussed as we speak, with a starting level of 750-1 trill, and added incentives for healhcare providers/responders, etc. and as arider to possibly 2 trill for infrastructure.

And with that, again you'd better be first in line. 

[wilbil]

16 minutes ago, buttock said:

And with that, again you'd better be first in line. 

not me. i will leave it for the persons that need it and deserve it. i had my chance in life, and am quite satisfied. sardines, pb&j, rice, forest green stuff is fine by me. i will never complain. 

[lighthouse]

What people picture in their heads when they hear "small business" and what the definitions actually are... two different things.

A roofing contractor with $16.2 million in annual revenue? Small business.

A sawmill with 450 employees? Small business.

A toy and hobby goods wholesaler with 155 employees? Not a small business.

A new car dealer with 180 employees? Small business.

A meat market with $9.0m in annual revenue? Not a small business.

A hobby, toy and game store with $28.0m in annual revenue? Small business.

The definitions depend on the industry. Some tied to revenue. Some tied to employee count. (Some industries are still considered "small business" with 1200 employees though they obviously wouldn't qualify for this specific program). Here's the lastest (2019) definitions by industry: https://www.sba.gov/sites/default/files/2019-08/SBA Table of Size Standards_Effective Aug 19%2C 2019_Rev.pdf

But if you had to guess who is going to get a SBA Paycheck Protection loan between a local restaurant chain with 4 locations and 300 employees, or comic shop with 4 employees? Best believe the restaurant chain is the favorite. Far more likely to already have a relationship with their bank, have bookkeeping and accounting folks at the ready to provide proper documents in minutes, and have advocates on their behalf at every step of the process if there is a hiccup.

I filed as early as I could. I certainly hope I get approved. But I think it's likely few "under 10 employee" businesses will see any of this money, as it's gobbled up quickly by the folks who qualify for 7-digit sums.

[buttock]

3 hours ago, lighthouse said:

What people picture in their heads when they hear "small business" and what the definitions actually are... two different things.

A roofing contractor with $16.2 million in annual revenue? Small business.

A sawmill with 450 employees? Small business.

A toy and hobby goods wholesaler with 155 employees? Not a small business.

A new car dealer with 180 employees? Small business.

A meat market with $9.0m in annual revenue? Not a small business.

A hobby, toy and game store with $28.0m in annual revenue? Small business.

The definitions depend on the industry. Some tied to revenue. Some tied to employee count. (Some industries are still considered "small business" with 1200 employees though they obviously wouldn't qualify for this specific program). Here's the lastest (2019) definitions by industry: https://www.sba.gov/sites/default/files/2019-08/SBA Table of Size Standards_Effective Aug 19%2C 2019_Rev.pdf

But if you had to guess who is going to get a SBA Paycheck Protection loan between a local restaurant chain with 4 locations and 300 employees, or comic shop with 4 employees? Best believe the restaurant chain is the favorite. Far more likely to already have a relationship with their bank, have bookkeeping and accounting folks at the ready to provide proper documents in minutes, and have advocates on their behalf at every step of the process if there is a hiccup.

I filed as early as I could. I certainly hope I get approved. But I think it's likely few "under 10 employee" businesses will see any of this money, as it's gobbled up quickly by the folks who qualify for 7-digit sums.

I have no problem with any of them getting the loans.  These types of businesses employ a lot of people.  Almost exactly half of the country, to be exact.  The more jobs saved, the better.