We are here to talk about the Patient Protection program. Explain the Paycheck Protection Program and give us a status report on how this part of the new law is doing. Guest thanks for having me on. The Paycheck Protection Program, right now, there is money available for businesses who need it. What it allows is a loan backed by the fda that will allow you to pay your employees potentially while your business is still closed. The first round of money for that program was 349 billion, and it ran out just after under two weeks, about 13 days. The second round of money, we believe there is still about 100 billion left. A lot of people think the program is over or that it is not available to them, but for Business Owners for whom this is a good solution for being able to keep their employees on, that is no money available, and they should apply if they think it will work for them. Host what did you learn in part one of this program . What needs improvement . Guest part one of the program come a lot of dissatisfaction was centered on the way it was executed. It was billed as a firstcome, firstserved program, but the banks were quickly overwhelmed with tens of thousands of applications in just a few hours, so they decided they would focus on their customers first, which come on the face of it, makes sense, but they focused on customers with whom they already had deep and substantial lending relationships. Practice, the largest customers got their money first, and some of the smaller businesses or those that did not have a steady relationship with the bank were not able to get money from that first. The fda also had a difficult time. Rules were intentionally written so a larger number of companies that normally apply for the sba thatams could apply, but unwittingly wracked in Public Companies that probably should not have gotten the money. So those were some of the problems. Now, as people have had more time to look at the program and tried to use the money from it, they are realizing that there is trouble with the design as well, and that is what some of the more recent legislation is trying to fix. Host our guest is editor at large at inc. Magazine and inc. Com, Kimberly Weisul. Here are what the phone lines will be. If you are a Small Business owner, call 202 7488000. If you are an employee at a Small Business, call 202 7488001. Everyone else, 202 7488002. We are talking here about the Paycheck Protection Program. It is now in phase two. Members of congress are looking to make additional changes to this. Before we get to calls for our guest, we will take a look at some of the dialogue from the senate floor as they were heading out of session, trying to make some changes. They ultimately did not. [video clip] specifically, the Paycheck Protection Program extension act that we are introducing today would do the following. It would allow borrowers 16 weeks to use their loan plans instead of eight weeks. Small businesses could choose the period that they believe works best to coincide with the reopening of their local economy. So some Small Businesses took the loans very early, thinking that the shutdowns would not or that the pandemic would be on the way down by now, which it is, in some states, thank goodness, but not in all. In more faxlt ability. Of would 16 weeks instead eight to use the loan funds. Second, it extends the deadline to apply for a ppp loan from june 30 to december 31 of this year. Fact thats reflexive for longer ined virtually every state than we when we were drafting the bill in march. Third, the bill will allow borrowers to use loan funds to purchase personal protective toipment for employees and pay for investments needed to reopen safely. Weisul, senator collins laying out the details there, but give us a more cific sense of where Kimberly Weisul, senator collins laying out that details there. Guest it was disappointing to see this not go through. Then point thing to understand is no matter if it is in this bill or the heroes bill, which will take longer, there is broad bipartisan agreement that part of this need to be changed. Right now, you have eight weeks from the time you get your money to use it, which means you can essentially keep your employees on payroll for eight weeks. Aset senator pointed out, the senator pointed out, it looks like a bridge to a cliff or a lot of businesses. She mentioned that people got the money early that was not necessarily there choice. There was wide agreement that it was going to run out, so it was erased for people to get it while it was Still Available so it was a race for people to get it while it was Still Available. Another part that was not in the clip is this requirement that you need to spend 75 of the money on payroll. At a time when a lot of businesses are having trouble getting their employees back or they do not want to be paying their employees to do nothing if they then will not have the money to pay them when they are reopening, that 75 hurdle is looking really difficult to clear. That is not something that requires congressional action. Actually, the treasury could do it, because they are the ones who implemented that rule. But they see no signs of wanting to change it. Those are the two things Business Owners have had most trouble, the eight week period in which to use the money and that 75 requirement. There is broad bipartisan support on changing both of them. The problem is the earliest companies to get the money are already very close to the end of their eight week period. So whether or not they have been able to use that money in the way stipulated by the law, they really need rarity, so we would really like you this, hopefully, changed, as soon as possible. If it does not change, again, at least people have clarity. It will probably mean that second amount of money will not go out to businesses as quickly, because, as people realize they cannot use it the way it is intended, they are becoming much more reluctant to seek the funds. Host thats go to calls. Victor from alabama, you are on the line with Kimberly Weisul. Caller good morning. Host yes, sir. Caller cspans host yes, victor, you are on live. We are talking about the Paycheck Protection Program. Do you have a question or comment . Caller yes, sir. I just told to a young lady who told me i would be next in line. Host you are here. Go ahead. Caller let me turn the tv down. I have one question for the young lady. Peopleoing to be ok for to pay back money that they have already earned i understand where youre coming from about paying the money, but shouldnt Small Business pay the money back . How are they going to come out of the hole if they are already in the whole hole . How do they come out if they have to pay it back . Host thank you. Guest you bring up a great point, which is that if the business uses 75 of the money to pay their employees, and their are few other allowed uses for that remaining 25 , than the loan can be forgiven. That is the reason people were stampeding to get the loan when they first became available. That is why this is so important to Small Businesses. It is for the exact reason you mentioned to you and many are concerned that, if they do not use it in the eight weeks or if they do not you 75 of it on payroll, they will not be able to get it forgiven. Most of them are not in a position to take on more debt, even though that would be a two year loan at 1 . What they need is loan forgiveness. It is important that these rules are written or the legislation is changed in the way you can get it. Because they are in a whole, and having more debt will not help. Andhey are in a hole, having more debt will not help. Host and talking about payrolls with small Business Owners, they can pay themselves, correct . Guest yes. Host are there any rules and assertions . Guest yes. You have to pay ourselves and your employees essentially what you pay them in a comparable eight week period last year. You all of a sudden cannot give everyone raises an use in the last week. You cannot prepay expenses to get them into the eight week period. Of if you look at the spirit the law, the idea is for you to be able to pay yourself what you would have been making if this had not happened, and to figure that out, you use a period from last year. Then, you are allowed to use it for yourself or pay and for your employees. If you are a 1099 contractor or if you are selfemployed, you can use it. If you are in a partnership, talk to your accountant, you can also use it. Under 5013orprofit, c can use it. Can the money be used for other forms of compensation as well . Maybe bonuses or Health Care Expenses . Be. T yes, they can with bonuses, it has to be reasonable. You are allowed to give someone a promotion if they have earned it. You are allowed to give some reasonable amount of hazard pay, if you have essential workers. Other types of compensation count. Employerntioned, the care. You can replace tips. Go to new york city, john. Good morning. Guest good morning. Llc Company Since 2013. Llcund my i file my taxes every year. Can you hear me . Host we can. Keep going. Caller so i file every year. Accept schwab does not applications, so i couldnt submit, so i went to the only other bank where i have a personal account, citibank. Citibank told me i couldnt submit the application because i did not have a business account, so i have no way to really apply to it. I did call cspan had the sba person a wild back. I wrote to him, called him i did not hear a word from him either. I tried calling my senator. There is a whole process to standing in email, which i will try to do, to see if they can help me. I just would like to know where i can call in. Guest this is another problem with the program. I am glad you brought it up. A lot of banks are no longer accepting applications, because they are the ones who are going to have to determine the forgiveness, and they are starting to realize how much work that is. You do not have to be a customer of a bank, or currently, to submit an application. I would go to a Community Bank near you and find out if they are accepting applications. If they are not, there are a number of online lenders that are. We have a list of them on our website, inc. Com, but i can tell you we have heard, still, people getting loans from intuit, they arepaypal doing a lot of loans, especially for Smaller Companies. And they are set up with the technology to get them through quickly. I would encourage you to look for online lenders. Some of them are lending money themselves. Some of them are in partnership the bank. Some of them have been approved by the sba. Some are working with partners who have been approved. I think it will go faster and you will get more transparency if you go with someone who has been approved themselves. But, from the very beginning, the online lenders wanted to be involved in this. At the later stages of the program, they are proving important, so i would go check that out. Host just a basic question you have written to many Business Owners that just do not understand if they are eligible and they may be reluctant to pursue this what would you tell those folks . Aret they probably eligible. The law has been written very broadly. There are lots of people and lots of businesses who would not normally be eligible for sba backed programs, and they are eligible for this one. 1099 employees and contractors, sole proprietors you only have to have payroll last year. You did not have to be profitable. When the banks, your online lender, the sba looks at these applications, it is not like a traditional loan. The idea is that it will be forgiven. They need to know you can legitimately pay employees with this loan. No matter how small your business is, you should take a look at this. Franchisees are often not eligible they are eligible under this program. Same for small nonprofits, same for partnerships. Really, it is very broad. Especially for Smaller Companies and partnerships, who thought they were not eligible, that is a reason there is still money left. A Small Business owner in leesburg, florida. What work do you do . Caller good morning. My wife is a nurse practitioner, and we have a virtual practice on phone that she responds to people with virtual care. I am not that hearing you. Then just keep going, and you will be able to hear our guest. Caller ok. The big question i have i am also president of our local eagles club, and we are a 501 c 8. The bank told us we are not eligible for the payroll protection plan, because we are c 8. Forave 10 employees we pay really minimal tasks, but we have to continue doing that, so i just do not know why we are not eligible for the c 8. The bank has told us that they showed that we are not eligible. I sent a letter to rick scott, our senator here. He says he is looking into this. Host thank you. What would you tell him . Guest unfortunately, from my understanding, his bank is correct. It is only the c 3s. But in the heroes act, they are s. King to expand it to c 6 but they are conscious of the fact they have left out a number of not for profits by only limiting it to c 3s. For now, unfortunately, your bank is correct. Host what else can you tell us about the heroes act which has only passed the house, not the senate . What else would it do to the Paycheck Protection Program . Guest as we said, it would change the amount of time that you have to use the money, which is huge. It would change the percentage that you need to use on payroll. It would also extend it, which is interesting. The last application was supposed to be 30 june, i believe. Now, it will go to december 31. That implies they will be money left, which no one expected. Right now, if your loan is not forgiven, you need to pay a back within two years. The heroes act would potentially extend that to five. And this is a bit in the weeds, but if you keep your employees on, you can get an employee production tax credit. Right now, if you also get a ppp loan, you cannot have the Employee Retention tax credit or they would change that so you would get both at the same time, or you could potentially get both at the same time. It would also try to carve out money specifically for businesses with fewer than 10 employees, specifically for notforprofit, and also for underrepresented communities. Those are some of the things specific to the Paycheck Protection Program that the heroes act again, it will be negotiated before all of this comes to light, but it is in proposal. Smalllets go to ron, Business Owner. What do you own . Caller i have a Membership Services business, where we try to encourage people to use cashback, which would ultimately regenerate money into the economy. The way that ppp is set up now, one would have to certify they have an employee. Do you know what about companies that want to hire people and try to offset the problems and try to help the country in that way . Do you know if the ppp will assist those wanting to hire people . Host thank you. Guest that is a good question. I do not know, frankly. The ppp is looking at preserving the employment levels you already have. There is talk about some sort of hiring incentive in the next round in the senate. At this point, i am not really sure how that would work under ppp. It is really looking at preserving the payroll you have now. Host to shelby in tennessee. Ander hi, cspan allamericans, and happy memorial day weekend. Thing is, in my local area, a lot of businesses have host keep going, if you can. Inler a lot of businesses my area are between a hard rock a rock and a hard place. And i agree with the male that says how are they going to pay back into hire their own employees, a lot of them. Its not been worked out good. Hard decision, response ability for all of them responsibility for all of them. Guest she is correct it has not been worked out well. However, the intent of the law and the guidance we have now is if they use 75 of that money towards paychecks, they will not have to pay it back, because congress understood that these businesses have really been hit hard by this. Many of them do not have good choices, and they do not necessarily want them to go further into debt. If they can pay 75 of the money they got from the loan to their employees, the other 25 can go towards rent, utilities, or mortgages on the place of business, then they will not have to pay it back. That is why so many businesses were interested in the program. Intersection the between Unemployment Benefits and money being received from people through this ppp. It took several weeks for the ppp to come into play. Explain how that works for the average worker. Guest this has been very complicated. HasBusiness Owners, the ppp the potential to turn them into ifalternate source of income businesses for workers, many of them have the option of a much more generous unemployment package than they used to have. The ppp gives Business Owners the money to hire workers back, but we saw a study from the university of chicago that took Something Like 68 of people eligible for unemployment now are getting more for on them than they would get if their business could hire them back. They are getting more unemployment than they were getting before. For Business Owners, it is very difficult to figure out what to do here, because some of their employees would be better off on unemployment. The problem is, of course, unemployment does not last forever. A lot of Business Owners who are insurancefer health want their employees to keep that, and for unemployment, they generally cannot. If it is a shortterm furlough, some Business Owners are working to keep their people on, but that is an important piece of that. Host lets hear from michael in cleveland, again, a Small Business owner. Tell us about your business and what your comment or question is for our guest. Caller yes, good morning. We were deemed essential in ohio because we are in the automotive business. It is a small operation. Two fulltime, three parttime. We do receive the loan. I am not exactly sure how they ourulated that based off of 941s for the past year. But the labor cost, the 75 , is at 940 and 941 . Comp. All included in that cost . Guest thank you. In general, that is your 941. It can also be Health Insurance and a few other benefits. I do not believe that it is workers comp, however. There is a fair amount in that definition of pay, but it is not everything. It is a little tricky, because you get an amount that is based on two and half months of payroll, but then you only have eight weeks to use it as opposed to the 10 weeks you got a based on i know it is confusing. It is confusing for everyone. It is one of the reasons they are looking to extend the time period. Mike is in madison heights, virginia, a Small Business employee. Tell us who you work for, what you do, and what your question is. My question is these Small Businesses have got these loans to pay their employees for hours. So what do you do with a company that is still working and charging the customers . Would that not be double dipping for the companies to be still performing work, you still see Construction Companies running up and down the road, charging companies to pay, yet the employees, some of them only get 25 hours a weekend a week and cannot draw and implement like as opposed to, but the company has got the money. Host good question there. Guest for one thing, in order to get the money, the company has to certify that they need it. That has been very confusing, because no one knew exactly how desperate you had to be to say that you needed the money. People were worried, if they had a line of credit perhaps, could they get the money . Since then, treasury has said that if you got less than 2 million, you are assumed to be acting in good faith. There are some states that have something called workshare that allow certain both on a plumbing and pay, like on implement for reduced hours, as it were. And it is true that the Business Owner could potentially be getting some revenue while also getting help from the ppp to pay payroll. Many businesses are not going out for clip, even if they are open. Payroll is typically a biggest second expense. There is rent, the cost of overhead, supplies so although the ppp, of course, is crucial to these businesses for paying payroll, it is not the only thing the business has to pay for, and they have to certify there is a need for it. Treasury has been very active in saying they will be investigating when they think there was not a need. , for folks who are running businesses, who want to take part in this program, how is the sba performing right now . Are they big enough to handle all of these requests and inquiries coming along . Guest i think, now, it is working fairly well. However, when there was really that rush for companies to get the money, the sba was asked to approve, in two weeks, Something Like 20 times the number of loans that they normally do in a year. So you can imagine how that works. The sba uses a system called etran to provide origination numbers, and it was routinely overwhelmed. The short answer is they are nowhere near big enough. The long answer is somehow they did it, got to the first two weeks, and now it seems to be working relatively well. Host what can you tell us about lending banks and their involvement in all of this . Are they getting what you consider to be regular fees as part of this process . Guest so the banks have also been overwhelmed. They only come at the beginning, wanted to work with their existing customers. Hundred 50,000 dollars, they make a 5 fee, which sounds generous, but the average loan size was about 200,000. Now, it has come down to about 37,000. A lot of loans in the past week were looking at 17,000. So they are making about 850 originating that loan, and they will also have to figure out the forgiveness on the other end. On the other hand, if they are doing an 8 Million Dollar loan, it may take the same amount of work them, they will make 1 on that, and come out a lot better. For banks to work with their larger clients, it works out quite well for them sometimes, even though the percentages are lower. For smaller clients, it is not really clear that they are doing well on this. This is really hard to say, because the banks were essentially interested for running a Relief Program for which they were also prepared. That is part of the dissatisfaction around the implementation around it was either not fail or not done well or their portals did not work, and a lot of that is true. On the other hand, the scope and speed of this was really unprecedented. I think part of the reason there is so much more money left is that loan sizes are going down, people understand better that this will work for them, and everyone is able to handle it in a more orderly fashion. Host time for a few more calls for our guest. Tom is in florida. Tell us your situation and your question. Caller my wife and i operate a business that contracts with state office supply, and our employees are actually 1099 contractors. Package. T paid by the right now, we are delivering very few packages. Butrive just as many miles, because they are 10 99, i do not qualify for any money from the ppp. Myi was to just shut business down, then my contractors could apply by themselves under the ppp, but then i lose my contract and all of my trucks will sit there and the banks will come and repossess them, so i feel like i am falling into a cap there. Guest there is somewhat of a gap there. If your employees are making less, you do not have two lay them off or fire them or anything like that for them to get some sort of compensation. If they can certify that they are making less and they have been hurt by this, they can apply for the ppp on their own, which is new in this program and has been confusing for a lot of people. Normally, you think of that as your cost, and therefore you would apply for ppp on their behalf, but the way it works is they apply, and they do not have to have zero income to apply for it, but they do have to be able to make it through the paperwork and the loan application process, which is streamlined compared to a traditional loan but is still a hurdle. Host patrick is an bardstown, kentucky. Caller good morning morning. If there is a second stimulus, and i am curious if there is a second stimulus and if congress has passed it yet. He is referring to the heroes act. Right now, maybe july 4, we will see something. We do not really know the crux of the negotiation seems to be over unemployment, because it is historically very generous. The heroes act would continue the 600 a week enhancement to unemployment. Republicans do not want to see that. It will take a while not in historical times a while, but it will not happen in the next couple of weeks. Oversighthas direct over this whole process . Guest this comes from treasury. At the beginning of this program, when they discover that some Public Companies have taken these loans out when they had, potentially, ample sources of other funds, they were talking about investigations. They have been very vocal that they will look at the larger loans. But about a week and a half ago, a week ago, they said that, if you had a loan of less than 2 million, there was a safe harbor there, and you are thought to be acting in good faith. But it will be treasury and the irs. Int lets hear from judith florida. A lot of florida callers this morning. Caller good morning. I am in the catering business, which, of course, we happen completely shut down since the end of march. We have not been able to have weddings, events, High School Graduation events. We are still kind of out of business. Even though we can have something now, people are still scared and are canceling. I am the owner of the business. I am not officially on the payroll. All i do is take a draw at the end of the month, what i can, to pay my bills. We did receive the loan, thank you. And i am paying the employees to keep them on staff. But ive been told by my accountant that i am not allowed to take one penny for myself, which i have not, so at this point, i am totally in a mess just to take a loan to pay my mortgage and my bills, because i have been three months now with totally no income. Is that correct or am i allowed to take something for myself . Host we touched on this earlier. What would you tell judith . Guest first off, i am not an accountant. But ive spoken to many accountants who say that if you take that draw on a pay one form, which is how most people take it if they recorded as income on their taxes, you should be able to pay yourself that amount. Seensure your account has you through a lot of difficult times. I would go back to them and check and get a second opinion. On the lineget ed from new jersey, a Small Business owner. What is your business . Caller i have a small consulting business. I did not start the business until early this year. I thought i heard the lady speaking saying that it was based upon last years income that you are paying people. Host can you clarify . Guest it depends on the exact date. I would check into that. If you started last year, you would absolutely be eligible, but i think it is into the very beginning of this year, technically. I would look into that. If you started in january, you will be ok. If you started in march, i am not so sure. Host joe from staten island, new york. Caller good morning. I am calling up about people applied to the sba loan, and the people were getting their money to take care of their workers. Say, arekers, lets the people also filing for unemployment and getting the , and that is not doing the right thing in being fair . Is that happening . Guest just like the banks who were trying to administer the ppp, on a plumbing offices are also overwhelmed. You are not allowed to do both those things. If you are being paid by an employer, whether it is for ppp or something else, you are able to also get unemployment. The exception would be if your hours happen cut and you are getting less. In some states, you can get a little bit of unemployed for the lost hours and therefore the lost income, but if you are getting paid through ppp or anything else, you can also get unemployment, generally. Host as we wrap up, what should Small Business employees and owners be thinking about the future of this program . Guest it looks like they will be money left for quite a while. At the beginning, people were really rushing to get it. I would take a hard look at it, take a look at when you might be able to reopen and at what level , like can you make money if you have reduced headcount in your restaurant . To some projections, see if you as it isay the money intended. If so, you may be able to get it. You may have to go through an online lender if your bank is no longer participating, but it does look like there will be money here for people who need it, so i encourage them to look into it. Host Kimberly Weisul is editor at large for inc. Magazine at inc. Com. Europewar in western 1944 to 1945. The final book in his liberation trilogy about the allied triumph in europe. Watch American History tv, tonight and over the weekend on cspan3. Tonight on the communicators, the publicpolicy Vice President on digital competition and why he thinks google has betrayed the internet. Interviewed by a reporter from politico. Of thele is moving all traffic to itself and dealternating the entire World Wide Web and cycling innovation, and ultimately harming consumers because they are not getting access to the best information from across the internet. Watch the communicators site at 8 00 eastern watch the communicators tonight at 8 00 eastern on cspan two. [inaudible] this week, watch live coverage of the launch of spacexs test flight marking the first lot of astronauts on american soil and spacecraft since 2011, tuesday at 10 00 a. M. Eastern them alive on cspan, the countdown clock briefing with nasa administrator jim bridenstine, wednesday, our live coverage of the spacex crew dragon launch begins at 12 15 p. M. Eastern on cspan two. With lift off at 4 30 p. M. As nasa astronauts launch to the International Space station. Then a post launch briefing with the nass Ministry Directives 00 p. M. Eastern, and thursday at 11 15 eastern on cspan two them day live coverage of the spacexs crew dragon as it docs at the iss. The opening the hatch between the two space vehicles in the event between the spacex crew dragon and the iss crew. Watch live on cspan and cspan2, online at cspan. 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