Dear Insight subscribers,
Amidst the macroeconomic challenges given the COVID-19 pandemic, we have some positive news to report. Based on the recent legislation passed by Congress and signed by the President, there is significant relief from the current economic toll of the Coronavirus for business owners and their employees. Many readers may already be familiar with this legislation, but we wanted to give you a summary of how you might benefit from the bill.
The U.S. Federal Government has made unprecedented strides to help business owners with some immediate relief, most notably through a $2 trillion CARES Act stimulus package that includes the Paycheck Protection Program (PPP) designed to provide funds in quick order to help small businesses retain and pay their current employees. The U.S. Chamber of Commerce has created a very good overview of what the program entails. We encourage you to download a copy here:
Some of the highlights include:
Who Is Eligible?
What Will Lenders Require?
In evaluating eligibility, lenders are directed to consider whether the borrower was in operation before February 15, 2020 and had employees for whom they paid salaries and payroll taxes. Certain lenders may have additional documentation requirements, so you should consider collecting your financials, payroll records, and tax returns ready to share with the lender.
What Lenders Will NOT Require
How Much Will You be Able to Borrow?
Loans can be up to 2.5x the borrower’s average monthly payroll costs, not to exceed $10 million. Some exclusions do apply to the calculation of payroll costs, so be sure to review the legislation closely with your tax or other trusted advisor.
The great news is that a borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:
However, Treasury guidance states that a borrower can only use up to 25% of the borrowed funds on something other than payroll if they want the amount forgiven.
There are exclusions to the loan forgiveness and specific limitations on how the borrowed funds may be used. We recommend that you consult with your tax advisor, and accountant, or other trusted advisor for full information on the PPP.
What Does This Mean For You?
We believe that this significant legislation will be critical in helping U.S. companies remain in business and prepare them and their associates for an eventual full recovery.
Overall, corporate balance sheets are strong, interest rates are very low, and capital is available for both business growth and acquisitions. Most importantly, the banking system is extremely stable and reserves are well above Federal guidelines.
From an M&A cycle perspective, while the markets are turbulent, we are still seeing significant buyer interest and we expect deal closings to ramp up rapidly once recovery begins.
In fact, we believe many business owners should be looking at this economic uncertainty as an opportunity to get their businesses ready for the pending M&A upswing by starting the exit planning process.
If you would like to learn more about how we can help you to build value in your business, and plan for your eventual exit, please call us at 972-232-1121 or visit our website, provide us with your contact information, and we will be in touch.
We wish you, your business, and your loved ones' safety and good health during this time. In the midst of challenges there are always blessings and opportunities. This situation is no different. History shows us that this too shall pass, and that when it does, we will emerge stronger than before.
Your Generational Team
DISCLAIMER: This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. Generational encourages readers to consult with appropriate legal and/or tax advisor.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Group’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Group to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Group is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.