Posted: Monday, April 6th, 2020
To our Customers, Vendors and Friends,
On Friday, we shared information and resources with you regarding the CARES Act including a key portion of this act which is the Paycheck Protection Program (PPP). Since then, there have been several updates made by the Small Business Administration (SBA) in the details of the PPP. As a result of these changes, there are many banks who have unanswered questions and are not yet accepting applications until they have clear direction from the SBA.
In an effort to provide any information we have that will help you and your employees through this crisis, below we are sharing information from our CPA firm – Gray, Gray & Gray as it pertains to these changes and what we know at this point:
- The Small Business Administration (SBA) which is administering the PPP program, has issued guidance that is different than the language in the CARES Act.
- The measurement period for determining average payroll costs is calendar year 2019 (not the trailing 12-month period). However, Gray, Gray & Gray have been told that some lenders are accepting the trailing twelve months.
- The payroll multiplier for the loan amount is 2.5 (as opposed to Tuesday’s communication by the SBA that it would be 2.25%).
- The interest rate that will be charged on the loan will be fixed at 1% (it was previously “up to” 4%).
- Payments to contractors are no longer allowed in the calculation of payroll costs.
- The term of the loan will be two years, not 10 as outlined in the CARES Act.
- It has been anticipated that a number of lenders will be requiring the following information along with the application:
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- Most recently filed corporate income tax returns
- All payroll tax returns (941’s and 940’s) supporting the 2019 payroll information included in the loan calculation
- Support for all employee benefits included in the calculation of payroll costs for the loan
- Copies of lease agreements demonstrating they were in place prior to 2/15/2020
- Copies of mortgage agreements demonstrating they were in place prior to 2/15/2020
- Copies of all utility bills
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- With regard to the 8-week period of costs that could be forgiven under the loan, it appears the following will need to be provided to qualify for forgiveness:
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- Copies of payroll reports for the 8-week period
- Copies of all support for benefits paid during the 8-week period
- Copies of cancelled checks or bank statements supporting payment on lease and mortgage interest payments
- Copies of cancelled checks as well as copies of utility invoices to support utilities paid during the 8-week period
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It’s important to note that all calculations of loan and forgiveness amounts are estimates and final numbers for the loan and related forgiveness will ultimately be determined by the bank based on the supporting information received. There is high probability that lenders may be reluctant to loan an amount that does not fall into the category of debt that will be forgiven (payroll, utilities, rent, mortgage). Therefore, the Paycheck Protection Program loan may be for an amount lower than many companies qualify for.
Below we have provided links to information and resources regarding the Paycheck Protection Program including a link to download the application. We will continue to pass along any information we have as it becomes available in an effort to help you, your employees and all of us navigate through these challenging times.
Sincerely,
David Gravel, CEO of GraVoc
Download the Paycheck Protection Program Borrower Application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Paycheck Protection Program Fact Sheet from the Treasury – Borrowers:
https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Paycheck Protection Program overview from SBA:
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp
Information on the CARES Act from Treasury:
https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
Families First Coronavirus Response Act Notice from Department of Labor:
https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
Families First Coronavirus Response Act Q&A from Department of Labor:
https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
IRS Economic Impact Payments – What You Need to Know:
https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
IRS Coronavirus Tax Relief FAQs:
https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs
Posted: Friday, April 3rd, 2020
To our Customers, Vendors and Friends,
As we draw to the close of another week of physical distancing, we hope that this message finds you all well. I am sure like us, all of you are trying to cope with this ever-changing situation, continuing your operations the best that you can while maintaining health and safety. There is nothing easy about any of this and it now appears we are going to be coping in this mode for at least another month if not longer. In this regard, I wanted to share with you some information that I received from our CPA firm – Gray Gray & Gray as it pertains to the CARES stimulus package. If you have not yet looked into this as a business, please do as it will help provide some much-needed fuel to your cashflow. While we are providing a link to the GG&G PDF that discusses all aspects of the program, the Paycheck Protection Loan Program should be of interest to many of us.
Paycheck Protection Loan Program:
- Loan covering payroll costs incurred during a “covered period.” A covered period means the period beginning on February 15, 2020 and ending on June 30, 2020.
- Eligible recipients include small businesses with less than 500 employees. It also includes certain nonprofit organizations, veterans’ organizations, or Tribal business concerns described in section 31(b)(2)(C) with less than 500 employees. The number of employees can exceed 500 employees; or if applicable, the size standard in number of employees established by the Administration for the industry in which the business concern, nonprofit organization, Veteran’s organization, or Tribal business concern operates.
- Businesses operating as a sole proprietorship also qualify.
- Loans can be obtained through banks or the SBA.
- Payroll costs include the following:
– The sum of payments of any compensation with respect to employees that is:-
- Salary, wage, commission, or similar compensation;
- Payment of cash tip or equivalent.
- Payment for vacation, parental, family, medical, or sick leave;
- Allowance for dismissal or separation;
- Payment required for the provisions of group health care benefits, including insurance premiums;
- Payment of any retirement benefit; or
- Payment of State or local tax assessed on the compensation of employees; and
- The sum of the payments to an independent contractor that would be subject to self-employment tax that do not exceed $100,000 (the amounts need to be prorated if less than a year).
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- Payroll costs shall not include:
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- Payroll of an employee that exceeds $100,000. (Need to prorate over the covered period if less than a year.)
- Compensation to an individual whose principal place of residence is outside of the U.S.
- Payroll tax withholding.
- Wages for which a credit was taken under Families First Coronavirus Response Act.
- Qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act.
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Maximum Loan Amount
– During the covered period, with respect to a covered loan, the maximum loan amount shall be the lesser of:-
- 2.5 times the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made or $10,000,000.
- In the case of an applicant that is a seasonal employer, the average total monthly payments for payroll shall be for the 12-week period beginning February 15, 2019, or at the election of the eligible recipient, March 1, 2019, and ending June 30, 2019.
- There are also rules around calculating the average for new businesses that have not been in existence for a full year
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- Allowable uses of the Loan Proceeds:
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- Payroll costs;
- Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
- Employee salaries, commissions, or similar compensations;
- Payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
- Rent (including rent under a lease agreement);
- Utilities; and
- Interest on any other debt obligations that were incurred before the covered period.
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- Loans carry a 10-year maturity with interest not to exceed 4 percent
- 6-month deferral of principal and interest
- Loan Forgiveness:
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- Recipients shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the 8-week period beginning on the date of the origination of the loan:
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Payroll costs;
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Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);
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Any payment on any covered rent obligation;
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Any covered utility payment.
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The loan forgiveness cannot exceed the principal;
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The loan forgiveness will be reduced to the extent there is a reduction in payroll during the 8-week covered period. There is an exception for rehired employees;
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The amount of forgiveness is excluded from gross income;
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Forgiveness cannot be combined with the Payroll Tax Deferment
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- Recipients shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the 8-week period beginning on the date of the origination of the loan:
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Really what this means is that if you participate in this program, and you maintain your employees, the loan money that you receive is a grant, and when the crisis ends you will be better able to return to normal operations without rehiring. It also helps us all protect our employees.
Along with the GG&G PDF I have also included the URL to the Treasury website where an application and instructions can be found. We want you all to remain safe and healthy, and to provide any information we have that will help you, your employees and all of us through this crisis. I am sure that together we can get through this.
Sincerely,
David Gravel, CEO of GraVoc
Download the Paycheck Protection Program Borrower Application form:
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
For information on the CARES Act from Treasury:
https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
CARES Act Summary PDF from Gray, Gray & Gray:
https://www.gravoc.com/wp-content/uploads/2020/04/CARES-Act-Summary-30Mar20.pdf
PPP Borrower PDF Information Fact Sheet from Treasury:
https://www.gravoc.com/wp-content/uploads/2020/04/PPP-Borrower-Information-Fact-Sheet_Treasury_03312020.pdf
Posted: Friday, March 27th 2020
To our Customers, Vendors and Friends,
It is hard to believe that another week has passed during these very unusual times. During this past week Governor Baker issued a stay at home requirement for all non-essential employees and businesses in the Commonwealth. While GraVoc is classified as an essential business due to the nature of support that we provide, we made the decision last Friday to move to our phase 3 of our pandemic plan for both the safety and security of our employees. We put this phase into effect as of Monday, March 23rd. While we have been keeping our office open for equipment and mail receipts, our team has been working remotely since that time. Our remote procedures are currently working both securely and efficiently and we have been able to stay fully operational and serving our very diverse customer base.
During the next several weeks, under phase 3 we will not be doing site visits or dispatching any of our employees. For equipment deliveries we will arrange for customer pickups and we will work with our customers by phone and video conference to provide any of the services that we would normally have done in person. Other than that, it is business as usual for us as we continue to service our customers and move projects forward.
We recognize that this is a very stressful time for many of you and we want you to please know we are here to help in any way possible to lessen the stress. In this past two weeks we have opened and closed hundreds of tickets providing support on establishing remote connections for our customers, as well as addressing ERP, CRM and application support needs as well. We have also been keeping a watchful eye on Cyber security issues as well.
In closing, many of you may have already been contacted by members of our team to check on your health and to ensure we are meeting your needs. We truly appreciate the kind expression of support that we have received in return. We will continue to keep you updated over the coming weeks. Please stay healthy and safe as we all look forward to an end of this pandemic crisis.
Sincerely,
David Gravel, CEO of GraVoc
Posted: Tuesday, March 17th 2020
To our Customers, Vendors and Friends,
First, happy St. Patrick’s Day to all of you. Amid all the Covid-19 information, it is easy to forget those things that make our lives feel normal. While I am sure this will be a very different year for celebrating this event and others, we wanted to take a moment to wish you all a great day.
On Monday of this week, GraVoc entered Phase 2 of our pandemic response plan. As we discussed in last week’s communication, we have now instructed our staff to not attend group meetings, outside meetings, trade shows etc. until further notice. We have also discontinued and cancelled any plans for travel. Our focus now is on remote support of our customers using all the virtual and remote technologies we have at our disposal. In response to the fast-changing situations, our staff was given the choice yesterday of working remote themselves. While many chose that option, our office will remain open unless and until we are ordered to shut down the facility through a work-in-place declaration by the Governor. Our staff continues to take all the recommended CDC precautions to ensure their safety regardless of their work location.
We want to emphasize to our customers that GraVoc is fully operational and is both ready and able to help during these very difficult times. Yesterday, we fielded an unprecedented number of calls for assistance helping our customers establish remote connectivity, remote printing, and remote application access through secure VPN connections. I am happy to report that our team handled the significant volume with both grace and dignity ensuring every ticket was closed by end of business. We would estimate that over 95% of our requests for support can be handled remotely, so we are poised to keep our customers and their network working productively, safely and securely.
As most of you are aware, GraVoc offers a wide range of services to help you design and implement remote worker environments that are secure and reliable that will enable you to work remotely and keep your business operational during these very challenging times. Our team is here and equipped ready to help you in any way you need.
We are all hoping that this virus threat passes quickly, and that we can return to normal operations soon, but we all must be prepared to prevail in a longer-term remote situation. We will keep you informed throughout the process, and we wish you all to be both safe and healthy.
Sincerely,
David Gravel, CEO of GraVoc
Posted: Friday, March 13th 2020
To our Customers, Vendors and Friends,
Like all of you, we are deeply concerned about the Covid-19 virus and the impact that it has on our employees, our customers, our vendors, our families and our friends. As a company we are doing everything we can to plan for the worst while we hope for the best.
In that regard we have already enacted Phase 1 of our pandemic response plan by:
- First, notifying our employees of the impending concern and the mitigation efforts that we either have in place or are putting in place.
- Distributing the CDC advisories to our team which provides a protocol for prevention and mitigation to include:
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- Hand washing and sanitizing
- Self-quarantine measures if you are sick
- Increased facility cleaning
- Avoiding risk when possible by using remote meetings and teleconferencing
- Minimizing exposure to crowds, unnecessary travel etc.
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- Creating a Microsoft Teams site for unified communications
- Preparing for safe and secure remote operations using secure VPN’s and high-level security protocols
- Addressing supply chain concerns with some inventory reserves for our customers
- Deploying technology that allows us to minimize the need for site-based support
- Deploying sanitization supplies in our vehicles and in our facility.
In Phase 2 of our plan, which we will likely be deploying this week, we will be instructing our staff to not attend large group meetings, trade shows etc. until further notice, and we will be reducing our on-site support to a minimum. Thus, we will be using virtual and remote technologies to provide support to our clients. We feel this next step is important for the safety of all. We have ordered protective accessories (gloves and masks) which, when they become available, will help us to ensure the safety of staff in the event of a required emergency visit.
We are hoping, like all of you, that we do not have to implement Phase 3 of our plan which is a strict quarantine. Fortunately, in that regard we are equipped and prepared to run 100% remote and we have done so on a test basis during past weather events. Using collaboration tools like Teams and GTM, we can connect to each other and to all of you and continue to work regardless of location. While working from our office location is quite convenient, we are prepared to address a longer-term remote situation and continue to provide a high quality of service and support.
In closing, our plan is to keep you all informed throughout the process. Certainly, if you need our support and assistance for anything we are here for you and we will continue to be here for you. In the interim, we wish everyone to be safe and healthy and for this virus issue to pass quickly.
Sincerely,
David Gravel, CEO of GraVoc