Three expert panelists joined us to talk all about small business loans. They give their advice on how to prepare for what’s next.
What do companies need to know about the CARES Act and Paycheck Protection Program?
Trying to keep up with small business loans during COVID-19 is exhausting. The $2 trillion coronavirus relief package, CARES Act, included $350 billion for a federal small business loan program called the Paycheck Protection Program (PPP). Shortly after the relief package launched, the government announced it ran out of money for the small business stimulus package. In addition, an announcement followed that another $310 billion would be available. However, with a large part already spoken for, it’s expected to go quickly. Furthermore, the third wave of funding is pending.
What We Learned About Small Business Loans and Funding Options
- The speakers talk about the difference between the types of loans available. For instance, the Paycheck Protection Program (PPP), Economic Industry Disaster Loan (EIDL), and more.
- The necessity of the loan will be a top concern in loan eligibility. As a result, our experts explain the meaning of “necessary to support ongoing operations as a result of current economic uncertainty.“
- You can use loan forgiveness for payroll costs (must be 75%), interest on a mortgage, rent, and utilities. Reports required for loan forgiveness include payroll reports, invoice and payment records for all benefits, state/local taxes, and non-payroll costs.
- There are other funding options for VC Backed Startups including:
- Prepayments from customers and “R&D” type revenue
- Bridge equity from existing investors
- Venture debt options
- Revenue-based loans
- R&D tax credits can reduce your payroll tax up to $250,000 (specifically for unprofitable startups) and is not part of the CARES Act. Also, companies who do not receive an SBA loan as part of the CARES Act will be able to defer 100% of its’ payroll taxes for the remainder of 2020.
- Unemployment insurance has expanded to cover furloughed employees. Some companies are moving salaried employees to hourly.
Now, who are the experts joining us today…
Small Business Loan Finance and Legal Experts
Chris Burns, Partner at CFOs2GO
Firstly, Chris is a consulting CFO, he helps companies solve financial challenges, realize opportunities and achieve strategic and financial goals. With 30+ years of hands-on financial leadership, delivering increased shareholder value, growth in cash flow and profits to startup and established market leaders, Chris strives to meet clients’ needs with CFOs2GO’s innovative consulting and recruiting solutions.
In addition, Chris co-leads the Startup, rapid growth and pre-IPO practice. It should be noted, his startup experience spans domestic and international high-growth e-commerce/internet retail, enterprise software, SAAS, and consumer products industries.
Kathryn Hickey, Partner at PilieroMazza
Secondly, Kathryn advises companies on SBA affiliation rules and related structuring concerns. This includes in the context of compliance with eligibility requirements for SBA loan programs. As a result, she concentrates her practice primarily in general business, mergers and acquisitions, venture capital investments, and commercial contracting. For instance, she regularly counsels companies on a wide range of legal issues, including:
- Entity formation and structure,
- Corporate governance,
- Employment issues,
- Commercial leasing,
- And, regulatory compliance.
Above all, PilieroMazza is on a mission to serve as your trusted legal advisor. They put your needs and goals at the center of business solutions through accessibility, honesty, innovation and unparalleled advocacy.
Healy Jones, Vice President of FP&A at Kruze Consulting
Lastly, Healy Jones leads the team that helps funded startups prepare for venture fund raises and managing cash flow and budgets. In short, he advises startups on the intersection of their strategy, financing and projections.
Kruze Consulting is a leading provider of accounting, finance, HR and tax consulting to seed and venture capital-funded startups. Subsequently, Kruze’s clients have collectively raised over $3.5 billion in VC financing, and larger companies acquire one to three of Kruze’s clients every month.
Webinar Attendee Testimonials
Lastly, here’s what our listeners thought of this podcast. You can check out the recording here.
“The presenters did an excellent job!” – Charles W., Accountant
“The explanations of each program available to small businesses helped differentiate between all the options available.” – Stephen C., CPA
“Information on what needs to be included in applying for the loans, credit and forgiveness of the PPP loan is valuable. They explained it in a format that was easy to follow and understand.” – Deborah K., CPA
Visit our updated COVID-19 Resource Center to read more perspectives and insights.