COVID-19 Resources
Navigating the Paycheck Protection Program
In response to Covid19, The Carrot Project is offering office hours and some information about PPP. The office hours are to help farmers and food producers, with under 500K gross income, in MA, CT, RI, and the Hudson Valley. Business advisors can help businesses consider the financial impact of COVID 19 and what changes, if any, they need to make. They can also help with basic support around PPP. Below is a message from their Client Service Specialist Jeff Cole, 4/27/2020
------------------------------------------------------------------------
The Paycheck Protection Program (PPP) was just approved for a second round of low interest, forgivable loans. The loans are designed to help small business owners pay their employees during this pandemic.
Not all loan uses are forgivable. Be sure you know your intended use of the loan funds. This article details what is and isn’t forgivable.
The first round of funding ran out within days. The second round opened up today (April 27th). If you plan to apply you should plan to do so as quickly as possible. You will apply through your bank so first make sure your bank is participating, and second: get in touch with them as soon as possible.
The application itself is pretty straightforward. We’ve detailed information below about common questions.
Do I qualify?
According to the Small Business Administration, the following entities may be eligible:
-
Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard). This includes farm businesses.
-
Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location.
-
Sole proprietors, independent contractors, and self-employed persons.
-
Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
-
500 employees, or
-
That meets the SBA industry size standard if more than 500
-
What can I use the funds for?
-
Payroll costs, including benefits;
-
Interest on mortgage obligations, incurred before February 15, 2020;
-
Rent, under lease agreements in force before February 15, 2020; and
-
Utilities, for which service began before February 15, 2020.
How do I calculate what I qualify for?
The following methodology (as detailed on the SBA website) which is one of the methodologies contained in the Act, will be most useful for many applicants.
Step 1: Aggregate payroll costs from the last twelve months for employees whose principal place of residence is the United States.
Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year.
Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).
The examples below illustrate this methodology.
Example 1 – No employees make more than $100,000 Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000 Maximum loan amount is $25,000
Example 2 – Some employees make more than $100,000 Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000
Multiply by 2.5 = $250,000
Maximum loan amount is $250,000
Example 3 – No employees make more than $100,000, outstanding EIDL
loan of $10,000.
Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000
Add EIDL loan of $10,000 = $35,000 Maximum loan amount is $35,000
Example 4 – Some employees make more than $100,000, outstanding EIDL (Economic Injury Disaster Loan
Emergency Advance) loan of $10,000
Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000
Multiply by 2.5 = $250,000
Add EIDL loan of $10,000 = $260,000
Maximum loan amount is $260,000
What qualifies as a payroll cost?
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.
A few helpful links:
If you need help figuring out if PPP is for you or filling out your application, feel free to reach out to Jeff Cole. While we are not experts, some of our consultants have experience helping other business owners navigate these new processes.
________________________________________________________________________________________________
Three of our business advisors have set aside time each week, for the foreseeable future, to offer private coaching through Zoom meetings or you may call in. Each ½ hour slot (limited to one per business at this time) requires pre-registration at least 24 hours in advance. This will help us better schedule sessions if demand is high. More extensive follow-up support is available. Contact Jeff Cole.
See below for a brief bio of each of the coaches along with their availability. To register for a session, click on the link after the advisors description.
Cian Dalzell (Three Maples Market Garden) is a farmer with experience providing planning, recordkeeping, and financial analysis for small new and beginning farmers. He has years of experience in produce and grocery wholesale and retail, including farmstand and CSA sales channels. Cian offers coaching on Wednesday evenings at 8 and 8:30 PM.
Register for his coaching here:
When: 08:00 PM Eastern Time (US and Canada):
https://zoom.us/meeting/register/tJAvd-6hqzkjHtVcyoHekmCAE8lOe4lYRpnT
or
When: 08:30 PM Eastern Time (US and Canada) https://zoom.us/meeting/register/tJAufuispz0uHNK84tzuKQoViRBB7FIM_bne
Brian Zweig is a business consultant with many years of experience helping farms and small businesses of all types. He works with both beginning and established businesses and is able to support complex operations. Brian offers coaching on Friday mornings at 10 and 10:30 AM.
Register for his coaching here:
When: 10:00 AM Eastern Time (US and Canada):
https://us02web.zoom.us/meeting/register/tZMrfuqsqj4qE9xrUuPBANFLl1YHFJc-rJ7I
or
When: 10:30 AM Eastern Time (US and Canada) https://us02web.zoom.us/meeting/register/tZApfu2orz4tGdDOCyRWGRBcDTIm0ZveDkcl
Julia Shanks is Carrot’s Senior Business Advisor. She has an MBA and is the author of the acclaimed “The Farmer’s Office” and training program “The Farmers Edge.” Julia supports food system businesses of many kinds, both local and national, including famers, food processors and restaurants. Julia offers coaching on Monday afternoons at 3 & 3:30 PM.
Register for her coaching here:
When: 3:00 PM Eastern Time (US and Canada)
https://zoom.us/j/99245464595?pwd=RHZSUG50alRHUEkxQ1dQdGJ3MEhnQT09
Meeting ID: 992 4546 4595
Password: 907442
or
When: 3:30 PM Eastern Time (US and Canada):
https://zoom.us/j/92344411490?pwd=Yytld3FtUlQzaGZJOFQxekY5ekpaUT09
Meeting ID: 923 4441 1490
Password: 914586
Also The Carrot Project is hosting an open conversation for producers each Thursday, from noon to 1PM ET. You can talk with other farmers and food producers, and me, about what’s working, what’s not, and what additional help would be good to have.
Join Zoom Meeting https://us02web.zoom.us/j/857629284
Meeting ID: 857 629 284
One tap mobile
+13126266799,,857629284# US (Chicago)
+16468769923,,857629284# US (New York)
Dial in:
+1 646 876 9923
+1 301 715 8592
+1 253 215 8782
Meeting ID: 857 629 284
