Episode 08: COVID-19:HR & Benefits Roadmap with guest Matt Byrne
In this episode, Fearless host Matt Byrne, of Spiralight Group takes us through his roadmap for benefits during the COVID-19 crisis. If you have a small business, navigating this pandemic can be one of, if not the most daunting task you’ve undertaken, this episode is full of useful information to help you break through the white noise.
Here is a quick self-service Prezi Presentation that I created which provides details, guidance and links to resources all in one place, it should take you 10-15 minutes to view; https://prezi.com/view/h1g3Ar5fw2XiQU… Matt Byrne has made a career helping people find affordable health insurance. He is the founder of Spiralight Group Benefits, a Dublin Ohio-based brokerage providing comprehensive insurance, HR consulting and compliance solutions for small- to mid-size businesses.
Matt has a Bachelor of Arts degree from Boston University and holds a life and health insurance license. He also serves as the President-elect for the Columbus chapter of the National Association Health Underwriters. Mr. Byrne is a subject matter expert speaking frequently about Health Care Reform, Employer Health Plans Affordability Programs, Association Health Plans, is certified in Self-Funded Solutions and is frequently quoted in national publications such as the Money Magazine, U.S. News and World Report and The Wall Street Journal.
Matt can be reached at (614) 372-6377 or by visiting http://www.grouphealthohio.com/ Instagram/Twitter: @grouphealthohio
This episode is sponsored by:
Matt Adams: [00:00:17] Hello, everyone. Matt Adams here from The Fearless Entrepreneur Podcast. Welcome to this week’s episode. We’re gonna be discussing Covid-19: H.R. and Benefits Roadmap. This is Episode 10. So we’re gonna be talking a little bit today about the human resources element associated with Covid-19. There are a myriad of strategies to consider layoffs, terminations, furloughs, essential services, working from home, paid leave, and how each of these strategy strategies could impact your eligibility for forgivable government loans and grants and how each strategy is going to impact your resumption of normal operations.
Matt Adams: [00:00:56] So I’m your host, Matt Adams. And joining me is my co-host, Matt Byrne, who is also going to be on the hot seat today answering some of these questions. Matt, hello.
Matt Byrne: [00:01:06] Hello.
Matt Adams: [00:01:08] Also, you guys can’t see him. Mike Lunt is here. He is behind the scenes operating the switchboard, as it were. We are three business owners based in Dublin, Ohio, with a wide range of experience and ventures. Matt, catch me up, man. How you been doing?
Matt Byrne: [00:01:26] I’ve been good. I’m actually in my office because I joke that, you know, this is the least population density place. I know. But employee benefits and insurance are essential services. So me and my team are working really hard through this crisis to keep people covered and help H.R. managers navigate the maze. But most of everyone in my team is working remotely. Things are good. Family’s good. I’m spending a little more time at home with my family. And, you know, I’m walking 30 minutes every day for the last 14 days. That’s that’s been good and exciting. And, you know, all things considered, things are good. I’m eager to get everybody back to work and get a sense of normalcy. And I think our businesses need to get unlocked here so we can get back to the good work we’re doing. But other than that, all things considered, I’m doing great. How are you guys doing? How about you, Mike?
Mike Lunt: [00:01:26] Yeah. Jump in here. Yeah, I’m doing well. Working from home like everyone else and got my big setup all connected up. So I run in. It’s quite interesting because I am running this whole thing from my house. And you guys are in the building that we usually recorded. So it’s a conplete show on line now.
Matt Adams: [00:02:42] Now, folks, if it’s been a while since we’ve been on, we’ve had a significant amount of time since our last podcast. And what precipitated a little bit of this was our good friend, Mike Lunt, and his wife had a baby boy.
Mike Lunt: [00:02:59] Yeah, we did. His name is Oliver. He is now seven months old. That’s how long we have been off. So that’s one hell of a paternity leave, Mike.
Matt Adams: [00:03:10] That’s a lot of Mike.
Matt Byrne: [00:03:12] Mike finally caught up in a sleep and said, let’s do the podcast again.
Mike Lunt: [00:03:17] You have no idea how true that statement is. Yeah, he’s he’s awesome. We’re very happy. And, yeah, he’s he’s great. That’s great. Congratulations.
Matt Byrne: [00:03:30] How are things in your world Matt Adams?
Matt Adams: [00:03:34] It’s my world is frenetic is the word. To the best, describe this. So I’ve got I’ve got three daughters and a son and ranging in ages from almost three to twelve. So twelve, nine or 12, 10, eight and soon to be three. So it’s been pretty crazy at home. My wife, who who also works with here with me at Dot The i Creative, is doing double duty as a teacher, actually, triple, quadruple duty, whatever you want to call it. Teacher running accounts payable and receivable project management for us. So it’s been crazy. So I’m actually just down the hall from you in my office so I can get these recording sessions without having to pause and edit out the little arguments that go on behind the scenes at our house with the with the little.
Matt Byrne: [00:04:31] We are we are social distance by about 40 yards between Mat’s office and my office. Well, thank you guys for joining us. Hey, I just want to remind you this information, this podcast should not be construed as legal tax or H.R. advice, but it’s provides a good faith understanding of the programs and the situation as we best understand it. Consult your attorney, tax advisor or H.R. expert before you implement a strategy that comes specially true for today’s episode, but also in general, know we’re just fellow entrepreneurs telling you about our journey and some of our observations and best practices. And but it shouldn’t be construed as a sort of formal consulting advice. And just want to remind everybody that. But today’s episode can have a lot of good facts, a lot of good details and a lot of good resources for you to help manage that.
Matt Byrne: [00:05:20] Some of those federal loans and grants and payroll protection programs, as well as some of the H.R. considerations that come along with that.
Matt Adams: [00:05:29] Well, before we get started on that, Matt, I do want to say thank you to our sponsors [00:05:32] Metro Data Center for providing us with the blended Internet, making this conversation possible. [00:05:37] So be sure to folks to check out their Web site, www.MetroDataCenter.com and also want to welcome our newest sponsor to the show. [00:05:47] The Dublin Entrepreneurial Center, [00:05:49] also known locally here in Dublin, Ohio, as the deck. And you can check them out at DECinDublin.com. The deck is a place where my office is located. Matt Byrne’s office for Spiralight Employee Benefits is located, and also Mike Lunt from Parasol Video. His offices are located when he’s not working remotely from home. Let’s get right into this to these questions. There is so much stuff going on out there with loans. How this all works. I’m very excited about this. Hopefully you’re going to be able to shine a light on this forest. Matt, many businesses, as you know, have been forced to reduce hours and staff. Dozens of employers are sharing of all sizes are really facing a lot of H.R. challenges. Tell me a little bit about some of the things that you’re seeing with your clients.
Matt Byrne: [00:06:41] Yeah, thanks for that, Matt. One heads up and note is that we’re going to have a we have a prezi presentation that’s kind of dynamically updated to self guided kind of online presentation, the cloud that every time we get new information or add any links or resources or slides, you’ll be able to see that. And every time you tap into it, it’s the freshest version. But regarding know kind of what I’m seeing, as you know, an employee benefits and H.R. consulting, you know, I have a couple hundred different clients at various different shapes and sizes. And it really runs the gamut on what I’m seeing. You know, I have a haircutting center that has one hundred and two employees in the state of Ohio. We were kind of ahead of the curve on on quick to shut things down and pull in the reins. And that’s really benefited our new case covered case head count. But you know that the governor mandated all of the haircutting centers shut down at three o’clock in the afternoon. He said you’ll have to shut down by five o’clock. So I had a client share with me that he had, you know, seventy thousand hours a week of income that went immediately to zero. In that case, he had to lay everybody off because literally these employees did not even have a building or a place to show up. And when you’re cutting hair, it’s not like you can make telephone calls or do envelope stuffing or pack equipment or things of that nature at your home.
Matt Byrne: [00:08:00] So, however, for a lot of my other clients who are more I.T. centric or consulting or service based, you know, many of them were already having some work at home, functionality or periodic, we would allow that. And for most of those clients, they’re simply allowing employees to work remotely and trying to keep them as productive as possible. And then, you know, for a lot of companies, the hybrid. You know, if you have half of your staff is factory and half of your staff is. Clerical back office, accounting sales. You know, they’re typically having to lay off the people from the the warehouses because unless you’re essential services, you know, in Ohio, you’re not allowed to report to work. And then the clerical back office staff sales, the administrative personnel are still kind of typically employed. And we’re only as best they can. Yeah, that that whole laying off and furloughing people is kind of a tricky maze and. Yeah. Considerations. So I got to ask you then, are are there protections in place? I mean, are they able to preserve any kind of benefits if they lay people off, if they furlough them, as it were? Yeah. You know, and they can that’s kind of a very unique situation in Ohio. Typically, you cannot offer someone employee benefits unless you have an employer and employee relationship or new furlough, layoff, downsize. You call it what you want. In essence, you no longer have a legal relationship between your prior employee and now what is your laid off employee.
Matt Byrne: [00:09:35] But the insurance companies are allowing you to keep those people on the insurance plan, even though typically they would be eligible for something like COBRA for companies with over 20 employees. But there’s something in the state of Ohio called Mini Cobra. It’s often called state continuation. And basically it’s almost identical to COBRA, except it’s only 12 months where you can get that. And so continuation of coverage typically takes the shape of COBRA if you’re over 20 state continuation or mini COBRA if you’re under 20, but allows people to stay on the health plan. And so being laid off know typically doesn’t allow you to stay on the employer’s health plan, you’re kind of segregated off the plan and then made a private offer to pay the premium associate with COBRA or in the case of groups under 20, what’s called mini COBRA. So what they’re doing is they’re not making anyone go through all those hoops of Cobra and many Cobra. If you laid off an employee, you can keep them on the health plan as long as you can continue to make their insurance premium payments on their behalf and be willing to do that financially because obviously you can’t collect the employee share of that insurance premium. I don’t know if, Mike, if you have access to the prezi presentation, but we’re going to put a link to it in the show notes. But in the top left hand corner of that presentation, it gives you some of the details about maintaining those health benefits.
Matt Byrne: [00:10:59] And you can click right on that button and it will kind of tell you a little bit more about the Ohio Department insurance, Bolton two thousand nineteen dash o three. And it provides one of the things it did was provide a 60 degree grace period for employers to pay the insurance premiums. So now they say, hey, you guys can stay on the health insurance instead of having people have to go through COBRA because they have to go through COBRA. They’re no longer insured by you. You kind of lose that that benefit connectivity to your employees. The you know, they they they could basically never come back to work for you and keep the COBRA or the or the state continuation program. So this allows you to keep it on, but also to defer having to pay the insurance company for up to 60 days. And so you can see in the example, it says a premium due on April 1st wouldn’t coverage would not terminate and would remain in full force even if the premiums were not paid for 60 days. So your April 1st premium, as long as you got him a check before May thirty first, you know, that plan would remain in good standing and in force. And if you go the next slide, make it what it talks where there’s some caution or considerations you should look at. Carriers could pander, hold the claims until the premiums are paid. Typically, I was told by one of the insurance companies the way they are ex claims system works that just pays in real time.
Matt Byrne: [00:12:11] And so when someone goes to fill a prescription that’s gone. That claim is going to get paid. Even if you as the employer or, you know, 30 days in your grace period, 45 days in your grace period. The prescriptions are typically going to pay without incident. But the employer but the health insurance company could pant or sit on on prescription claims. So let’s say they got a bunch of claims the week of April 1st through the 7th. And then the next week they got some more claims. And let’s say by mid May, they have 40 different claims that they haven’t paid any of them on. They have rejected them either. They’re just sitting on them. Now, when your premium payment comes in 50 days late within this 60 day grace period, then they would go ahead and honor those claims and retroactively pay them. But if for some reason you your policy lapse or terminates either intentionally because you say, hey, listen, I just can’t do it or unintentionally because you kind of juggled the grace period, which you missed the boat, then all of those claims that were incurred from April 1st until, you know, you will go, they’ll be your responsibility or theoretically, you could be held liable or exposed if those claims go denied and unpaid. You could have some employees walking in with copies of bills saying, hey, listen, you gave me the expectation I was gonna have insurance. You had a grace period that you mismanaged.
Matt Byrne: [00:13:28] And now all these claims have retroactive to April 1st. And I need you to help me make it right. So that’s a little bit of consideration I want to share with employers and make sure that they go into that with their eyes open. Now, if you go, the next slide might get.
Matt Byrne: [00:13:44] Thanks. Now, if you lay off a worker, like I said, you know, they don’t have to go on state continuation. This, like, kind of walk you through some of that information. You know, they don’t have to go on COBRA or state continuation. You can keep them on their health plan. But the consideration or caution on this particular one is that you’ve got that next slide, Mike.
Matt Byrne: [00:14:07] Things, you know, as I mentioned before, you won’t be able to collect any of the employee contributions during this time. So not only the time when your revenue is suppressed, you’re kind of making the decision, hey, I want to offer and contain and maintain health benefits. But you can’t collect the employees portion of that either. And so one of the things that you want to be careful of is that. You know, if that employee either chooses not to come back because they go work for someone else or start their own business, or you choose not to bring them back because business never returns to the level in which their position is warranted to be reestablished, you may forever lose your ability to collect those premiums from your employer for their share of the health insurance. But assuming most your employees come back, you know, obviously you could just accelerate the amount of deductions. You know, if you’re taking out fifty dollars per paycheck now or prior to the covered crisis, you know, maybe a bump that up to seventy five dollars a paycheck until you’ve kind of let them repay you for the two or three months you might have carry their insurance premium.
Matt Byrne: [00:15:12] Now, the Carers Act is going to provide some relief for that, allowing employers through various different loans and grants to maybe help weather the storm of providing ongoing health insurance and even potentially providing ongoing employment. So, you know, you can kind of back out to the main slide, Mike, and we can go from there in this presentation, something that you’ll you can see if you’re watching with the video. But if you’re not, there’s that’s the maintaining health benefits section. The unemployment section is right below. That kind of gives you just a link. And there’s kind of a mass layoff number to kind of accelerate your employees access to unemployment. But really, what a lot of the things you’re seeing about the payroll protection loans and the E IDL loans and grants is trying to give you a mechanism by which you can keep your people employed, not lay them off. And so we can talk about that a little bit more as well.
Matt Adams: [00:16:04] Yeah. So then there are the bottom left. I see that FFC are a paid leave. Are there any new requirements for this or things the same. What’s what’s the story there.
Matt Byrne: [00:16:14] Yeah. Let’s talk about the it’s the family’s first act, the paid leave requirements. That’s kind of a unique and brand new thing that just happened. It’s different than the emergency grants and loans and the patient per year. The payroll protection program loans, the paid leave requirements. So a lot of us are aware of FMLA. So that’s the Federal Medical Leave Act. And basically what it says is for employers over 50 employees, you’re required to give your employees 10 weeks unpaid time off to help deal with a medical crisis for themselves or someone in their family. There’s a host of other mechanisms by which somebody could declare a demand. FMLA didn’t apply to employers under 50 the FFCRA. The Families First Act, came out and said that all employers under five hundred employees must allow their employees up to 12 weeks of paid time off. A lot of employers were like, wow, paid time off. That seems really scary. How are we gonna do that when we are revenues down? And and the definition of this this kind of Cauvin centric FFC CRH paid time off is if they have to stay home to care for themselves or a sick loved one based on a covered contamination or diagnosis, or if they’re unable to report to work and nor the can they telecommute due to the need to care for children whose school was closed due to covered, which is pretty much everybody in the state of Ohio. And many of the states across the United States are the kids are home and dealing with school from their home base.
Matt Adams: [00:17:50] But these people can ask you as the employer for up to 12 weeks paid vacation or not vacation, I’m sorry, paid leave. And they’re going to refund that cost of of that paid leave to you through the employer 941 payroll tax credit. So, you know, a week ago or a week and a half ago, I was having a conversation with one of my payroll payroll partnerships and they said, yeah, the nine one payroll tax credit is like six point two percent of payroll. It’s basically it’s a subset of FICA, you know, so FICA is is seven point six, five percent. That’s that’s one of one of them employer taxes that you pay. And it’s part of the 941 tax. But the 941 specific to this is six point two percent. So what he said is he’d like to have one of your employees at fifteen dollars an hour telling you that they wanted to be paid time off. You would need if they’re making fifteen dollars an hour, you would need twenty thousand dollars of regular payroll. So that the six point two percent tax credit could be sufficient to cover their paycheck for a fifty dollar an hour employee for one paycheck. And so we quickly were saying, you know, they’re asking employers to finance this leave and it could take an employer months to collect a 941 tax credit to get whole. Now, Mike, if you go back to the slide, there was one more deeper in there and what they came out with, like literally yesterday or the day before, what it said was.
Matt Byrne: [00:19:15] And, yeah, maybe it’s not on there, but, yeah. There you go.
Matt Byrne: [00:19:21] If you’re if if 941 tax credits are insufficient.
Matt Byrne: [00:19:26] To cover the costs of the leave, you can ask the IRS for an accelerated payment. So in essence, they’re going to. You can petition for them to make you financially whole. So quick recap on all this. If somebody if you keep your employees hired now, if they get laid off or if they get downsized or furloughed is paid, leave requirement is not available to them. But if you keep them employed, they could come to you and demand paid time off and you’ll have to pay them, but you will get reimbursed or refund it through the 941 tax credit.
Matt Byrne: [00:19:58] And if that’s insufficient to make you whole, you can petition the IRS for a accelerated payment. So that’s kind of the FFCRA paid leave requirements. Again, we’re not talking about the payroll protection loan yet. We’re not talking about the EIDL loans and grants yet. But that is something that we should talk about and discuss. Matt, have you heard much about that? I mean, what’s what’s your read on at all?
Matt Adams: [00:20:21] So we’ve been going through the application process, and if you haven’t started that, you know, the applications. You know, the SBA is is saying, you look, you’ve got to talk with your bank. We’ve done an SBA loan about a year and a half, two years ago. So that was you know, it was nice. But definitely when you’re calling your bank, make sure you have everything pulled together for that phone call. I think it is it’s a much more streamlined process than what we had gone through originally. But, yeah. And, you know, there’s a lot of misinformation out there. I’ve heard people talk about how they’re going to use their loans and tell me. Matt, do you happen to have a list or something you can give me here for situations where the payroll protection program loan is not forgivable?
Matt Byrne: [00:21:06] Yeah, sure. Yeah, it’s a good question. So, first of all, let’s kind of recalibrate with what is the payroll protection program. And, you know, if you go to the president, the top Right-Hand circle, you can get some detail about what that looks like. But first of all, the payroll protection loan is a federal loan provided to a business. It’s going to look at your last 12 months of payroll. It’s going to take an average monthly payroll for the last 12 months. So let’s say you have ten thousand dollars of average monthly payroll.
Matt Byrne: [00:21:38] You would be entitled to a loan equal to 2.5 times that number. So in that example, be twenty five thousand dollars. And what’s going to happen is, is they’re going to give you that money. And as long as you spend that money within the first eight weeks on the following items and I think if you go to what can what can the money be used for, it’s the middle circle on the on the right. Yeah. You can spend on payroll costs. Payments four to ten. Ninety nine group health benefits. Right. So that’s going to help you bridge that gap from when you lay your employees off to when they lose their health insurance. That may be very important. And as you rehire really you spend a lot of time and money winning the war for talent and hiring good people. The last thing you want them to do is feel that any sort of layoff or furloughing is symptomatic of how you feel about them. And one way to kind of keep them connected, your company is through the health insurance, but you can spend these payroll protection loans on payroll. Group health benefits, salaries, commissions, bonuses, tips, rent and lease.
Matt Byrne: [00:22:42] So if you have a restaurant or a building or lease a retail shop or you pay for like we’re at the Dublin Entrepreneurial Center, it’s a great community where people support each other and take care of each other. And we have a lot of great resources and amenities here. Well, even though most of us are home, we can use this money to pay our lease at the Dublin Entrepreneurial Center, utilities and then a debt you incurred before March 27. So let’s say I’ve got a I’ve got a car lease payment or a truck lease payment or, you know, I owe my accountant money, I can use that money for that.
Matt Byrne: [00:23:20] Now, regarding forgiveness, Matt had asked a specific question, so any money that you spend the first eight weeks on those qualifying areas they just talked about, that money will be forgiven.
Matt Byrne: [00:23:33] Most of the money spent in the first eight weeks following the loan, if they’re spent on payroll health insurance for one K. Business mortgages and leases would be forgiven. Anything that you can’t spend in that first eight weeks or if you have to spend money in an area that wasn’t eligible that we just discussed, it converts to a two year loan at a point five percent interest rate with no prepayment penalty.
Matt Byrne: [00:23:54] And I believe there’s a six month, a 12 month deferral as well.
Matt Adams: [00:23:57] So literally, you could get this money next week and not have to even start making payments on a year. But they’re going to forgive everything that you spend on payroll, health insurance for a one K mortgage and leases. But let’s say you can only spend you get, you know, twenty five thousand hour loan. You can only spend 15 of it. Well, the remaining ten thousand don’t convert to a loan, but if you want to you have to start making a payment on it for six to twelve months. Now you do need to spend 75 percent of the payroll protection plan or program. Proceeds have to start on payroll costs as defined above. You know, all all of those items listed in the list. And if you I created a great graphic says, how is your forgiveness reduced? And it’s from the U.S. Chamber of Commerce. And I kind of screenshot their document that talks about it. But basically what it’s saying is, is that not all of this money is going to be forgiven. And some of this is not going to be forgiven is if you have a reduction in headcount. Let’s say you had two hundred. Let’s say you had one hundred one hundred employees. And on June 30th, if that number is more than 25 percent reduced, you could affect and they could erode. How much of that loan is forgiven or let’s say you say, hey, I want everybody take Fridays off and I’m giving everybody a 25 percent cut in wages that to those wage numbers are going to be measured before and and then again on June 30th.
Matt Byrne: [00:25:20] And so this slide kind of shows you some of that. And you guys can go back to the Prezi presentation, look in the show notes and get that link and and look at that more detail to the later time. But, you know, if you do it right and you manage things well, most of this money could be forgiven and probably should be mad. I know that you were in my office earlier today saying, you know, people play their cards right and just be smart about it. Most all of this PPP money should be forgiven. Yeah. Yeah. Well, so tell me, then. A little confusing on the EDL grants. And the loans are what? Maybe spend. Give us a little bit of what’s the difference between the EDL and the PDP loan? Yeah, so the PPP is the payroll protection. Right, and again, they defined how much you get by 2.5 times your trailing 12 months of payroll. By the way, a caveat. Anyone making more than a hundred thousand dollars in that calculation is capped. It’s not that you can’t pay them their full amount. It’s just you can’t calculate your loan at any amount greater than 100 grand. So count that hundred thousand other owner employee in the number. But you you just cap them at a hundred grand.
Matt Byrne: [00:26:36] And so the people peer just about protecting people’s jobs and paychecks and benefits. The EIDL That’s the Economic Injury Disaster Loan Assistance Program has two components. One component is a grand a grant for ten thousand dollars. It’s almost like an advance and it’s an accelerated thing. So that’s the same application link. It’s just, you know, when you make your application or at least that kind of preliminary application, which only takes about 10 minutes, 15 minutes, you basically are going to tell em what their gross revenue is, going to tell them what your some of your operating expense information is, cost of goods sold, things of that nature. You know, your name, address. And at the end of the application, you put in your hefty bank draft information, but you can check a box and says, would you like 10000 of this accelerated? And so our understanding is, is that EDL Grant is ten thousand dollars. And if you can drill into slide number one. Mike, I can give you some information about that. So it’s not alone. It doesn’t need to be replayed. Even if they for some reason denied your ideal loan. You know the biggest difference, Matt. To answer your question is PPP forgivable. EIDL, the grant is a grant and you don’t have to repay it. But anything else in the E IDL program is really a loan to low interest loan.
Matt Byrne: [00:28:00] So the grant is just the first ten thousand of that. So the link that you click at the bottom of this slide and I know, Mike, if you can click that link so we can show him where it takes us. But if you click that link, it’s going to take you right to the economic injury disaster loan application. And you can see it here on the screen. Basically, you click the first one says, my businesses under 500 employees, you make sure that you’re not a felon or that you’re, you know, confirm that you’re a citizen of the United States. You do all those things and check all those boxes. And you click next and ask for some of your revenue information, some of your cost of goods, sold information, click Mexican. You put your name, your address and your banking information. There’s a button that says, please check this if you’d like this. Ten thousand, our grant to be kind of accelerated. And they’re supposed to get that two and three to five days after making the application. And then the balance and typically the amount of the EDL now. So let’s talk about the idea alone.
Matt Byrne: [00:28:52] It’s the same applications, the same process. Now, they may. My thinking is I’ve already done this, but I haven’t you know, I think what they’ll do is they’re gonna reach out to you and say, hey, listen, we got your E-L loan application. We’ve sent you the ten thousand dollar grant advance, which you are understanding is that that does not have to be paid back. And typically, you can apply for a second. Yeah, go ahead, Mike.
Mike Lunt: [00:29:12] But you guys, I read somewhere today that it’s not ten thousand dollars guaranteed, so. OK, you may get a loan based on whether or not you are regardless of whether or not you are approved for the loan. But you may actually not receive ten thousand dollars. And it could actually be based upon the amount of people that you have working for you. So if you have one employee, you may only see a thousand dollars versus 10.
Mike Lunt: [00:29:41] So it’s up to ten thousand dollars, not a thousand.
Matt Byrne: [00:29:44] Gotcha. I did not know that. Yeah. Yeah. And I wasn’t saying that that 10000 was guaranteed.
Matt Byrne: [00:29:50] But but what Mike is clarifying is that you may be eligible for up to 10000 hours of a grant. It sounds like it’s kind of a function of how many employees you have and maybe what some of your revenues are. But anyway, the first up to the first 10000 of it is going to be a grant. And typically, it appears to be fully forgiven or not, even if signed alone. But the balance of it, typically, you can ask for up to 50 percent of your trailing 12 months gross revenues. So let’s say your total sales last year were two million dollars.
Matt Byrne: [00:30:24] This ITIL loan. And if you go to the next dot, mike, the next slide, the idea alone is just it’s.
Matt Byrne: [00:30:33] You know, it’s a three point seventy five percent interest rate loan, not for not profits is two point seventy five, but you can take up to two million dollars not to exceed 50 percent of your prior year gross revenue.
Matt Byrne: [00:30:48] And you can receive the a.D.A EDL grant for up to ten thousand. The PDP alone, which is the payroll protection loan for up to 2.5 times your average monthly payroll. And this e IDL loan for up to 50 percent of your prior years, gross revenue.
Matt Adams: [00:31:06] But you just can’t use the proceeds for the same thing twice. Right. You can’t, you know, use it to pay payroll. If you’ve got a P.P. loan to pay payroll. But, you know, maybe it’s about, you know, it has to be connected to some sort of economic injury, loss of revenue. You know, if you lost a few clients or if your restaurant had to shut down for a few weeks or, you know, in my case, being in the employee benefits and health insurance, you know, anytime someone gets laid off or terminated or that relationship is severed, you know, there’s there’s a person is no longer insured and my and my range and my scope of business. So there’s a reduction. There are people if they if companies go out of business or eliminate their health benefits, you know, that’s going to economic impact my business. So my ideal loan could be to help me replace that. But it’s capped at two million, not to exceed 50 percent of your gross revenues. And so that’s the main difference, you’ve got the peepee payroll protection program and you’ve got the EDL. The grant is just that, you know, that first part accelerated out. Up to ten thousand, as Mike clarifies. If you’re a group of one or if you don’t have certain meet certain requirements, they may reduce how much of that grant is appropriate for you. But that money is supposed to come within three to five days. Whatever that number ends up being. I haven’t actually ran into anyone who’s gotten the grant yet. Matt, have you gotten your grant yet? Me there.
Matt Adams: [00:32:27] How long? Yeah. No, actually. And actually, I think in it’s been over, it’s been over a week now.
Matt Byrne: [00:32:36] Yeah, me too. You know, I, I just put this out there because I put mine in a week ago and really didn’t hear anything. And I kind of started getting worried because I used to have an old company. And I think you’ve got you know, and I talked about in a prior episode I the chemical engineering laboratory, and it had a tax I.D. numbers like, well, maybe I put the tax I.D. for my old company in there and that that’s why I never got anything or when I really think happened is I was so early on the job, I was so quick to pull that trigger that I did it while it was still some sort of Beda temporary or some sort of application that wasn’t working right. I redid it today and I got like an OMB number and see what this thing’s called. That’s OMB Office of Management Budget Control number and an EDI’s I feel like some big serial number. Did you guys get one of those? Did you? Yeah. No, I don’t think so.
Matt Adams: [00:33:31] Mike, you were saying something there. I’ve just missed you. Would you say yes.
Mike Lunt: [00:33:34] So I didn’t receive even an email confirmation. I received the submitted confirmation once they did online. So I have a number from that. But I didn’t receive any kind of follow up email.No pending transactions and my bank statements? Nothing. So I was like, well, do I need to go back in and reapply? That sounds like you can do that. But I you know, I’m I’m a worrier when it comes to that kind of thing. I don’t want to apply twice and then build up. And I’m like, well, you’ve applied twice now, so we’re going to.
Matt Byrne: [00:34:09] I know I was reluctant to do it as well. Well, I read I read the email a little bit more carefully this time or not the e-mail, but I read the thing and it said once you’re once we start processing your application, we’ll send an email. So not that you would get one immediately or even if you did get one immediately. I don’t believe I did. But that once we actually started processing our application, then you get an email almost like, you know, we’ve opened your file and we’re starting to look through it. It’s in the queue that you would get an email. So it sounds like, Mike, maybe that e-mail was telling you that you’re in the queue from last week and maybe this week they’ll give you a call and they may reach out for additional documentation. You might have to provide tax returns, you know, personal financial statements. You know, it’s kind of unclear what they’re gonna ask, certainly your bank typically after those types of things. And Matt Adams, I’d be curious to have you walk us through what the peepee loan process was through your bank and what some of the questions they asked. But on the E IDL, non forgivable loans, the three point seventy five percent interest loans and any grant you may be eligible for. It sounds like they they’re gonna let you know once they start processing your application. Matt, what was the PDP loan process for your local bank? Oh, by the way, a point of note. The E IDL is done through the SBA website. It’s the link in the Prezzie presentation that you can find in the show notes it is not through your bank. The payroll protection stuff is through your bank. And Matt went through that process with his bank. You got anything to share on that, Matt?
Matt Adams: [00:35:38] You know, I can certainly get I’m at the circle back with you on that. Candidly speaking, my chief financial officer, also my own as my wife, who handles accounts payable receivable, was the one actually on the phone with our banker to get everything. Maybe we’ll do a follow up conversation with her and get her on here. And to talk a little bit about that, I will say that, you know, there are some elements and I will put this in the show notes the requirements that they wanted us to have in place for the phone conversation, which included profit loss sheets over the last few months. And then all twenty nineteen. It was, ah, our payroll spreadsheets over the last few months and all of twenty nineteen. And there were some other elements there that I don’t seem to recall touched my heads. I will have to get all of that and put that into the show notes and then I think we’ll do a follow up with, with Marie to see what, which, what insights, things that she can share. She was pretty adamant about the fact that we needed to come to that conversation with all that information and even doing the calculations that two and a half times calculation, they’re not going to do that work for you. So fully being fully prepared. So I’ll be sure to include that stuff down inside the show notes so that we can give everybody all the updated information.
Matt Byrne: [00:36:57] Yeah, thanks for that, Matt. And I know that the that that I’ll link that I provide kind of takes you right to that digital application. If you go to the SBA Web site and you look at the payroll protection program loans, there was a nice little checklist of items that they felt that your bank was propaganda and ask you for. And it was, like Matt said, payroll records, profit and loss record. They need to document your gross revenues. You know, there’s a bunch of things going on there. So we’ll provide you a link to that checklist of things you need and any sort of nuances that. Marie Adams has suggested we should prepare for. But I’ve heard that that people have to, like, hang up and then call back because they don’t know. And a lot of these banks will do it by the phone. Another note is it’s got to be an SBA approved lender. So make sure you’re dealing with one of those. I’m sure your bank would love to entertain that. They’re capable of providing you with this loan, make sure that they’re approved for the P.P. loan process and that they’re an SBA lender. You know, Matt Adams has luxury that his bank, Huntington, is an SBA lender and he has a prior relationship with getting SBA loans from them. So I’d imagine you’re gonna be in the front of the line, Matt.
Matt Adams: [00:38:04] I hope so. I hope that’s the case. And also, if your bank does not already have that SBA relationship and even if they do either, from what I understand, you know, Huntington is going to move much faster for a lot of folks because they do have they are they are the largest SBA lender in the United States.So they do have infrastructure in place with that department, their own SBA specific people. So they are going to be moving things through. I know the first day that when they were available to take phone calls, there was twice that we were sitting on hold. Forty five minutes and they just disconnected us. Waited too long on a whim, Marie decided to give them a call on Saturday and got right through. So she was able to get everything taken care of in that day. So that first phone call is going to be with the person who’s gathering all the information. And then, from what I understand in the process, is going to be a follow up phone call from the underwriter to go over everything with you. There need to be able to provide all of that documentation as a PDAF to them so they can finish the underwriting and get you approved and moving forward.
Matt Byrne: [00:39:16] Yeah, I heard I heard Huntington and U.S. Bank were kind of to probably others. So I don’t want to, you know, suggest that there aren’t any others. But Huntington, the U.S. bank where were frontrunners on the SBA loans, is an Ohio. And I know that Huntington apply by phone numbers, eight eight eight eight four five seven five five six. We’ll put that in the show notes. So if you want want to reach out to them, you’ll know how to do it.
Matt Adams: [00:39:43] So, you know, there’s a lot of resources out there. The first thing versus definitely talk with your accountant. And and then your banker, your accountants going to have all kinds of information. We were just on a webinar with them this morning as they the rules and laws and everything as they understand it. And that information is constantly being updated. So hopefully the information we’re providing today won’t change much. But as they do, we will do add updates, as my method said in our show notes. So, Matt, let me ask you when this whole thing is over. And if you’ve laid off employees or furloughed employees as an employer, how do they decide which employees should come back first?
Matt Byrne: [00:40:31] Yeah, that’s a good question. Are also which ones are the first to be laid off? Which ones are the first to come back? And there’s a lot of moving parts to that question into the answer. So, you know, if you if you want to kind of discuss your unique situation, let me know. But my simplest way to put it is I always joke. You know, you can do anything in a jar assuming you’re not discriminating or injuring anybody in any specific way that you do it consistently. That’s well documented. So the spirit of this is that, you know, typically there’s there’s a lot of classing and discrimination rules as it relates to, you know, risk is the governing body for health benefits. And Department of Labor has a lot to say about these things and the EEOC. And there’s just a lot of governing bodies that want to protect your employees from being unfairly treated. But the hallmark of that is, you know, if you can if you can say, hey, you know, all of my warehouse staff need to get laid off, you know, you’re not saying these six get laid off and these five get to stick around unless you have a very specific documentation on why that is. You know, all of my telephone staff need to get laid off or all my telephone staff can work from home. But my, you know, maintenance staff cannot because they can’t, you know, work on the building, whether at home, you know, as long as you’re making decisions that are consistent, well-documented and that aren’t discriminating against any one employee or group of employees, you know. And it is appropriate, you know, you can change people’s comp. You can choose their decision to work from home based on a few typical IRS classing rules. And one of those is the length of service location where they work duties and responsibilities. So your sales people versus your accounting people, your warehouse people versus your maintenance people, you know, if they have different bonafide IRS definitions, that’s typically how you make a classing decision. And so just not that that applies in every layoff situation and every hiring situation and every pay raise or pay cut situation. As long as you’re looking through those classing lenses, I think I can keep a lot of employers out of trouble. You know, like, let’s say for benefits, for example, you know, you’re going to provide 60 percent of the premiums will be paid for anyone working for you under a year and 80 percent for anyone who’s been working for you for over five years. You’re not necessarily saying, you know, these favorite people in my company, you know, or this particular person gets 80 and this particular of a person gets 75 because she doesn’t work as hard as the person is getting 80. That’s not an appropriate you know, how hard they work, how much you like them. Those are not appropriate ways to change your policies and rules about how you provide benefits, how much you pay for those benefits. You know, how you lay people off and how you return them to work. Now, all that said, you know, obviously you’re when you’re returning people to work, I mean, you’re laying people off. It’s you know, it’s like, OK, let’s say we’re a print shop and it’s like our calendar division has been decimated. We have no revenue there. Everybody in our calendar division is getting laid off. You know, that makes sense. It’s a business decision or I need to lay off 60 percent of them. That’s where it kind of gets tricky. All right. I need to lay off 60 percent of my counter. You might say, OK, I’m a lay off everybody under three years. And that that gives me the the 40 percent are need or all over three your employees and you’re making decisions that are global and not discriminatory. Same thing. I’m bringing people back. You know, you might have your you know, your parts department at your dealership might come back first because it’s online and virtual. Right. So it’s OK that it might be the the salespeople when the floor actually opens and we stop social distancing, that they’re the last press people to be brought back in. Or you only need, you know, 20 percent of your sales team for the next six months. How do you decide which ones to come back? And that’s a business decision. You might say. We’re going to do a lot of truck fleet stuff and I need my truck fleet guys back first. So, you know, the short answer is you’ve got to use your business decision to make those decisions and to drive that train. I get that. But when in doing so, try to do it in a way where you’re creating populations of people and not, you know, picking and choosing and playing favorites as you lay people off or as you bring them back on. OK. That’s my long answer.
Matt Adams: [00:44:56] So. Well, you know, I think we need to move into other some key takeaways here. I don’t want to keep our guests for too long. So, Matt, a couple of points here. What are some key takeaways that you would you’d offer?
Matt Byrne: [00:45:13] [00:45:13]Maintain employment as long as humanly possible. You spend too much time and money. Winning the war for talent to let them all scatter to the wind. And when you lay them off. That happens. If you have to lay them off. Keep their benefits going, even if it means you taking on some risk, even if it means you’re carrying the employee’s share of the premium for a while. [00:45:33] There are payroll protection program loans to help you pay for that investment and that risk. But certainly try to keep their benefits. Because in this health crisis of COVID-19. It’s crucially important to keep people insured. And you know, anyone who’s ever gone through a cobra or knows that nobody can afford COBRA. So you’re begging your employees to do the unthinkable, which is going insured now. They will have a qualifying event for private coverage. But again, it’s not cheap. It’s not expensive. They rely on your generosity to help them pay their premium. Keep them employed, keep them insured. And then the final thing is, is that you have an opportunity to really stand out with your clients and your employees, for that matter, to be exceptional and to gain market share knowledge in the war for talent and getting good people to come and want to work for you by how you handle yourself and how you treat them, but also for your employees. You sure your company provides a great service and of great value, do not retreat into a hole. You’ve got to come out fighting and a lot of your competitors are kicking back, taking a short hiatus here, fearful, scared. And you know, the Fearless Entrepreneur podcast is not for the faint of heart. It’s for the people who want to grab the brass ring. And there is a huge amount of opportunity to help and provide value to your clients. It’s not self-serving. It’s the opposite of that. If you know anything about me and Marans of my clients. It’s about serving first and taking care of our clients and providing value, not being predatory or opportunistic. And no more time than right now to help set yourself apart and go do marketing. Beat the drama I’m at. I’d like to hear your your spin on that. I mean, how’s the marketing budgets looking right now? Is that a mistake or is that it’s.
Matt Adams: [00:47:23] Oh, no. This is if you’re providing a valuable service and you were doing sales, providing services before this and you’re still continue to do so, definitely keep marketing. There is there are case study after case study after case study that point to the importance of marketing during any sort of an economic downturn. This is a chance where that inventory levels are super high when it comes to marketing assets. TV, radio, traditional media. This is an opportunity to either maintain what you were doing with with regard to your marketing or increase it because many businesses are retreating and this is a chance for you to really increase market share. Also, the great part about it is things are inexpensive right now. I see a lot of advertising costs are much, much, much lower than what we were spending even three weeks ago. So if you can do it, if you can find ways to continue with your marketing, obviously I’m somewhat biased in that. Look to some historical examples of why that is important for you to keep doing that now. And when the market picks back up, sales are going to pick up.
Matt Byrne: [00:48:41] Absolutely. And don’t forget that while all your hold on that while all your employees are home, you know, can you be doing a marketing mailer campaign and having your salespeople send it out to follow phone calls against it? Can you be doubling down your social media to kind of get some eyeballs? Are all of your target clients doing what we’re all doing? We’re actually looking you know, we’re all the bandwidth is low. We’re kind of trying to figure out ways to be productive at home. Do you have an opportunity to message them through advertising, marketing, radio, TV, print, social or just good old fashioned, calling them and getting into a conversation with them that they may not have been had the band with to give you a six weeks ago? So I’m a firm believer in that. Yes, it’s a time to get market share. Yeah.
Matt Adams: [00:49:24] At the bare minimum, you know, your your customers love you, right? This is a great chance, even at the minimum, just reaching out and say, hey, you know, if you haven’t done so already, this would be a great time to review us on Google. We would love to have you tell your story. It’s going to pay dividends for your brand as long as you keep pushing the message out there and talking with guests. Well, listen, we’re running long here. I want to switch cell, folks. Matt, where can they reach you? What’s the best way to to get in touch with you if they have an H.R. question?
Matt Byrne: [00:49:59] Yeah. Well, you can go to my Web site at spirally group dot com. That’s spiralightgroup.com. So you can find me at LinkedIn at the same company, but also my name, Matthew Byrne. Facebook and Instagram. Pretty easy to find in the social space, Twitter. Just find me send me a message, and I’m happy to provide you a free telephone consult if I can kind of walk you through some of the things you’re dealing with and help you kind of better stand your risk and your exposure and ways to keep yourself and your employees safe and happy. And you’ll make sure that those H.R. considerations are being properly dealt with and thought about.
Matt Adams: [00:50:42] Folks, this podcast is available on Apple, Google Play, Spotify and iHeart Radio. Wherever else you get your podcasts, we encourage you to subscribe to hear the latest episodes as they are released. This is also available on YouTube. So please hit that subscribe button. Please give us a review. It really helps us to reach out to more entrepreneurs like you. Matt Byrne, thank you so much for your for your help today. If you have a topic you would like for us to discuss. Please post it in the comments section below or on our Facebook page. Email us. There’s all kinds of ways to do that. That’s that’s it from us today. So until next time, folks stay fearless.