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HR Basecamp: Income Planning During Downtime

April 05, 2020 Dental Whale Season 1 Episode 6
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HR Basecamp: Income Planning During Downtime
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HR Basecamp: Income Planning During Downtime
Apr 05, 2020 Season 1 Episode 6
Dental Whale

Paul Edwards explains financial relief strategies to support staff at home. When revenue is limited, it's important to know how to plan ahead and access the right resources, policies and legislation that make money available to support families during and beyond the pandemic.

Show Notes Transcript

Paul Edwards explains financial relief strategies to support staff at home. When revenue is limited, it's important to know how to plan ahead and access the right resources, policies and legislation that make money available to support families during and beyond the pandemic.

spk_0:   0:09
Hello, Dr Tim McNamara. Here. Listen, what you're about to watch is ah, Webinar, really? A zoom meeting with Paul Edwards, the founder of CEO, founder of Cedar HR Solutions and a good friend of mine. What we do is we go through some really good stuff here we go through f m l A. Why you need some sort of policy for your employees that are working from home. And what sort of risk that that kind of creates for you. Why you need to be tracking the hours that these people are doing and what sort of risk that creates for you. We also go through and identify the DPP loan and that E i D l low. Well, listen, I'm here to tell you that I totally screwed this up. I started calling it the e i p l o. I have no idea what it was. You know, the question was posed. Should we re film? This is my answer is no. I'm not nervous about, you know, maybe appearing dumber than I actually am on this in front of you and maybe said differently. I'm not nervous about being as dumb as I actually am. in front of you. Listen, I'm a dentist business owner. I'm going through all of this with you. It's just pure madness. So I missed up an acronym. Hopefully, you're smarter than me and you pick up on it. And I hope that this brings you a lot of value. I'll see you guys on the other side of the madness of all of this. So the latest and greatest, that's what we're gonna be talking about today. The bill has passed. If you guys watch following my first webinar, there was a lot of useful information there, some of it helpful, some of it not relevant anymore. So today we're gonna kind of stuff. Start fresh. Bill has passed. Treasury has made some modifications to those bills. And then also, I'd like you to kind of walk us through what we need to be thinking about in terms of today with our employees at home with sort of protections we need of that. And then also, let's talk cash flow on how we could get access to cash. So my hope is we can hammer through this and that the end user can or the in viewer can watch this and then hopefully feel like they have a sense of confidence on what in the world is happening.

spk_1:   2:06
Okay, so, um, you know, I think Tim today I think we should talk about unemployment because that's now out of supercharged. I have little bit of information there. The family first act, the sum of the FMLA provisions have gone into effect. I think we should talk about that. Um, I also want to speak to remote work. Um, and you know, I'm gonna give you guys were gonna put together a remote work policy that you can use. And I believe this is something you're gonna use throughout the year. And then we will circle back to the S p A, uh, that kind of triple P loan, the PPP, the paycheck protection plan, or whatever the heck that thing is, and and the other types of SP A loans will circle back around to that and I get I'll deliver some bulleted strategy on this. I'm finally being able to kind of take a step back from the c p. A role, the bank being sort of explaining this stuff from which I'm not a c p a Let's be really clear about that. But I do have some strategy and some bullet points that you can consider on your own and take to your c p a and bankers that they may not be thinking about right now. So we've always tried to be a bit of a business strategic partner with our members. You know, sometimes they don't even realize we're thinking about the long term relationship things they're gonna be facing in the years to come when we're working with him on a charge. So that's what I'd like to cover today.

spk_0:   3:32
I love it. I love it is a business owner. And I know the people that are watching this or business owners. This is what we need. So protect us. And you know what? I got my white war back here. If we need to start scribbling, I'll start scribbling. But you lead us, and we're gonna listen.

spk_1:   3:46
Okay, so today, um, General March April, it's getting second. So I'm having to do, but I use my fingers to figure out what day it is. It's 4 to 2020 on Let's talk about unemployment and supercharged. All right, so, uh, briefly, all states have unemployment programs the feds do not. So the money has always come from the states. You've paid taxes a little tiny percentage point of your payroll every single time it's run, and it's creating this bank of money that funds your unemployment, your state for all employers. In the first film family first act they sent built several $1,000,000,000 down to the States and said, Hey, here is some money to help you with your unemployment. And then they added something from the fads. Which is there going to be super charging it by giving anyone who is affected by the Corona virus on extra $600 per week? That program appears to run through the end of July. I'm and could be extended. It is funded for longer. But I think they wanted to, you know, they wanted to end at some point. And they're hoping most people will be back on the rolls working for their employers by then. So state unemployment,

spk_0:   5:07
I got unemployment insurance. If you wonder what I did with you, I there Yeah, And then I heard it, you know, state which we pay our you know, percentage of tax on which may be a good question now is a business owner. We probably don't know how much this is gonna be impacted. What I'll be paying later, Correct.

spk_1:   5:23
Yeah, but we'll all be paying it later. So in the non bizarro world in the previous world that we were in each, each a business was, uh, charged a tiny percentage based on their experience rating, which was based on their turnover. So if you weren't firing or letting a lot of people go, then you're paid less tax. If you're returning people over a lot when you were paying a little more tax, it is pretty much limited. Thio a tiny tax on the 1st $9000 that you pay an employee. So it is very much kept down.

spk_0:   5:55
Yeah. Yeah. And so I called this material for the time being.

spk_1:   6:01
Yeah. I don't

spk_0:   6:01
know. Maybe a concern. You'll be fine. That's not the big one worry about. No. I heard you say the fed pumped in $600 for a week to go. One who is going on unemployment because of corrupt? That is correct. So in addition to what employees? So I've got let's say I laid off my whole team. In addition to what they're collecting from the state, they also now have access to more money from the fan, which is also distributed through the state.

spk_1:   6:29
Absolutely. At least that's what we think. The arrest may get involved in this and pump money into people's bank accounts, but I'm not exactly sure how that's gonna work.

spk_0:   6:37
Right. Right. So, um good. So now I have some employees that are probably making more money on unemployment than they were making

spk_1:   6:45
before. Yes, depending on where you are in the country, you may have others. And, um, you know, we said this last time you want to remember this is economic stimulus for your employees and for your community. When you open back up, you would like your patients who are other people's employees that have money as well. It's really, however, this sticks in your craw if it does at all. Um, I'm going tell him from the South. Um, originally, however it sticks, you got to realize that this is stimulus money, that they're trying to get down into your local restaurants and your gentle practices in your local businesses, and I quite frankly, can't think of a better way to do it if they were gonna do

spk_0:   7:27
it. Yeah, well, if you are employing them out there, you're watching this. It means you value them and so good they deserve it. That's part of this. So we'll just keep rolling with it. So, unemployment, we've got state. We got $600 plus what the state was already pumping in. What what do I need to know is a business owner on what should I be communicating to my team today On maybe at this point, most people are watching this have already started communicated. Maybe some of them are waiting to hear the next step. Maybe I'm still employing my employees and paying them full right now. Talk to me about what I should be doing in the business.

spk_1:   8:04
Well, we early on three weeks ago in this first kind of hit the fan, we began advising our members to go ahead and get their people on unemployment and thio get them off your payroll because of the long term strategy that we need to have running in the back of our mind, which is we don't exactly know when we're gonna be returning to work. We don't know what we're going to need our cash flow for. So if we have money in the bank or in our reserves are in our lines of credit. We've given that guide inside immediately as a kind of a business strategic HR partner, preserve your income and in any way that you can. And so with that logic, we said, Get him on the state, get him into this program, which is specifically designed for him. And then the feds dropped in another $600 so that became really clear that that was the best route to go. Now then, one of the things that we're seeing is, um a lot of states have something in place called work share. It's actually says you can work part time. If you lose some hours from a job, you can still apply for work, share support. Other states don't call it work share, but they will still allow you to work and get partial unemployment. Still, other states have some kind of water mark. There's a few states out there that say, Look, if you work 20 hours or more, you can't come apply you can't even apply for unemployment. And so what we would like toe the strategy we would like to give our employers is, too, if you're just about to do this. And most of you have already executed on this kind of plan. But if you're about to do this, tell your employees to apply for full unemployment. Remove the bear all the barriers, regardless, What your plans are for that employee going forward. Okay? Likewise. If you were in one of those states who are actually doing what, the feds actually asked them not to do this. But if you are in one of these states, we're putting up barriers to getting unemployment. Because of employees slated to work some part time hours, I would I would have them resubmit. Give them our letter. That shows a full layoff. So go back to them. Unemployment is gonna go. Wait a minute. You said you were working part time. What? What? What's the truth here? And they're gonna give that letter that says, Yeah. No, I've been fully laid off.

spk_0:   10:34
Okay. So as I'm interpreting this as from dentist idiot dentists out there, I'm taking your words and I'm hearing this apply for full unemployment. So that way where our employees are getting the equipment there accepted into the program, If they're gonna work some hours now, we're just reporting back those hours which will reduce the eligibility.

spk_1:   10:54
That's exactly right. And furthers limited states that say something like, If you work, I don't know 15 hours or 20 hours, you get booted off the role. Then it's your job now is a as an employer to figure out a way to not work. Then pass that mark. Let's do that, because again, remember, I'm not trying to keep people in the government. Dole literally, That is not my role or my conversation, but in this case, we have a long term strategy running, and we want our employees to be taken care of as well as possible, cause honestly, I mean, I know this is crazy, but you're actually helping your community by making sure they get is much of this money into your community is possible.

spk_0:   11:35
This you're absolutely right, and I could go off on a whole nother webinar about how dentists are leaders in the community and right now is no better time than to show that for this, though, I put a little book went just has no my state raise. So know your state regulations. Make sure you stay below that. That is You just advised

spk_1:   11:51
you stay below it and just go forward. So that's what I think. Everything I need to let everybody know about unemployment right now.

spk_0:   11:58
That's good. So I can't even see a glare from my window here. Can you see that white board?

spk_1:   12:04
I can see it pretty well. So we're gonna We're

spk_0:   12:06
gonna make this sloppy for a second year. You guys need to see what I just wrote down there.

spk_1:   12:11
Yeah, Let's do it.

spk_0:   12:15
All right. So I'm gonna erase that and let's keep attacking this thing,

spk_1:   12:19
okay? We're gonna move into the family first at and the new FMLA requirements, and they're in a scary is they seem

spk_0:   12:31
they what?

spk_1:   12:32
They're not as scary as they seem.

spk_0:   12:36
Emily, can I live with that? And we're so good.

spk_1:   12:39
Let's call it. Yeah, let's just go. And f m l A. Yeah. Put an f f behind it. The family first at dash F f a.

spk_0:   12:48
We go. Okay. Just all

spk_1:   12:51
right. Here we go. Okay. The first thing. I'm just gonna talk in general, give you the high level of what? The two things that this thing covers. One of them is is sick leave and one of if someone has the virus, um, or is taking care of someone who has the virus. That's one of them. You would have to pay two weeks a sickly for that, Um, that's 80 hours that you would have to pay

spk_0:   13:25
the hours aid leave God.

spk_1:   13:33
Okay, If you are operating and you go underneath a mandatory quarantine and your employees cannot tell a work or work at work, then there's an 80 hour requirement there that you would have on initial 80 hours,

spk_0:   13:55
so I didn't know that. So I have an assistant who obviously can't work from home when the office is closed. I am responsible for 80 hours. Uh, go

spk_1:   14:05
if that employees working. If they're if they're laid off, by the way, everybody and this has been a big question. If they're already on unemployment, then that's where they are.

spk_0:   14:15
Yeah,

spk_1:   14:17
And if they're on women and they're working a little bit of part time, they're not eligible for any of this either.

spk_0:   14:23
Okay, so. But you can't work and not you. I So I know you are. Yeah, this also applies. Yeah, but that means business owners, we need to make a decision. If they can't work, probably should be laying them up for some reason. Keeping them on what they want to take care of him. Understand? We owe 80 hours.

spk_1:   14:40
Yeah, we need to get him. We need to get him over, and then the next. The last one is is a important one. They put this new thing in that says that if for any reason one of your workers needs to stay at home to take care of their child and again they can't tell a work. Um and they're not able to tell the work If they need to take care of a child, then you would owe them up to 10 weeks of pay. And it's any reduced amount. It's at, like, 2/3 of their regular pay. So how that might work is that you could have someone who could tell the work most of the time man take care of their kids, but at times they can't do both, and therefore they could start taking advantage of what we would cut. We call intermittent leave and service in L. A thing doesn't mean that they don't necessarily have to just go on 10 straight weeks of this pay. It couldn't be intermittent use of it.

spk_0:   15:43
Interesting. So now offhand, is this Do you know is this state percentages? I heard you kind of say that this thing may range is doing by state. Or is it? No.

spk_1:   15:54
Now, this is federal. Every step, every single employer with 500 or fewer employees, no matter who you are a subject to this and I want to get rid of everybody's thing. About what? I'm getting an exclusion. If I'm under 50 employees or if I'm a health care provider, I you got You got to get away from all of that because that is not being applied to you is the rules were being written right now?

spk_0:   16:19
Okay, we'll upgrade. My bullet points here because, like, what if childcare can't work? And then I put intermittent leave. I think I was zoning out their teacher teaching again, please. So So what was he was 10 weeks.

spk_1:   16:32
It's 10 weeks at 2/3 pay.

spk_0:   16:35
Okay, 2/3 that's about us.

spk_1:   16:36
Yeah, at 10

spk_0:   16:37
years and we to theirs. That's perfect. And that is federal. So that's not gonna arrange my state. That is what it is.

spk_1:   16:47
That is what it is. Now, here's the thing that should make you feel better. But we still need to talk about this in context of going forward. The thing that should make you feel better is is that when you pay any one of these rules, however, you have to pay whether it's 80 hours, 2/3 all intimately or whatever, you really need to track those hours in a different category. The reason why is is that when you go to pay those hours, you do not have to pay any of the federal taxes associated with them insurance, and you can submit a form to the I. R s. Well, who will then? Within two weeks of receiving the form, I give you a tax credit. Full refund of that money back. Okay? No, not good. But it's not to be used later, but we're talking cash right back in your hands.

spk_0:   17:38
Okay, so track that separately. Yes, Got it.

spk_1:   17:42
Yes. Your robust timekeeping systems are very important now. And you know, Tim, we were talking about this before we started, but that's something else that I'm gonna offer your people is a way, way better time tracking in PTO system use of actual human resource information system. That cedar is created for our members. It's just dawning on me as I'm talking to you that they probably would like to use this.

spk_0:   18:09
Yeah, definitely. And in addition, if you're watching this well and I were speaking about is we're gonna get to some policies that you need to have in place for your employees that are working at home. So that also will be part of this. And maybe that's where we jump next. But yeah, this is very generous of you. And and in this upside down world, Paul, we're taking anything. You give it, so

spk_1:   18:31
All right. So I think we kind of explained that it's clear as mud to everybody. Yeah, and, um, by the way, we're providing really good explanations on this in our log on our Corona virus page. So I'm you know, that's another resource, Tim, and I'll talk about what? You can go there and get more information, and we also have some forms. You guys can ask specific questions around this, and we're in their answering questions

spk_0:   18:58
and you'll like it there. Where they How did they get there?

spk_1:   19:01
Well, if they want to go to the Forum, one of the best forms we have is HR Base camp on Facebook. That's a group. It's private. You have to put some information, and it's only for doctors and managers. You have to give us your information. We do some quick research to see you are who you are, and then we let you in. What's really great about the group is not just some of the stuff we're putting up, but that the people that are in there, like the Texas people, are beginning to inform each other of how successful their employees are. What challenges is that they're having when it comes to applying for unemployment, and we have no way of knowing that that's fantastic. So so people are helping each other super positive space. You're not allowing anybody to pitch anything in there. Um, you know, it's just just solely for HR, so

spk_0:   19:45
that's great. That's great, thank you. And I hope

spk_1:   19:47
that cedar solutions dot com and look for the Corona Virus banner and just click on it. And there's just a ton of stuff we're updating in every couple of days. And I want to get back to the family first at why that's important. Yes. Long term strategy, Tim. We could all come back to work in some way, shape or form within the next couple of months. Be working for a short period of time or a longer period of time and then have the flu come back. I'm sorry. The virus. Come back. Um, and then here we go again. Yeah, and so you're gonna need to understand these rules, I think for the winter of the year, until this lost sunsets on December 31st. Okay, mechanism in place. And as soon as it kicks in again, If you're in a hot spot and you get quarantined for a short period time, you're immediately going to want to start categorizing that time properly so that you can show, show proof of it to the fans and get your money back. That

spk_0:   20:45
is really, really smart advice. That's good stuff.

spk_1:   20:49
Okay, so going through my notes 10. Let's move to remote work. Okay. Pretty good, man.

spk_0:   20:56
Yeah, right. So the old internal auditor in me right now is your policies and procedures. You're right.

spk_1:   21:05
I don't think this is so exciting for this thing that we're, like, rules old. Nice. All right. So, um, um, you know, one of the things I just want to mention, Tim, you know, he really discussed this before, but I I formed Cedar in 2006 really started to take clients on the 2007. And by 2000 mid 7 4008 I had probably at least 300. You know, members, you know, people that were with us and we were supporting the company was growing. One of the things that happened during that period was that we were suffering through an economic downturn. And, you know, we had a really pretty big meltdown there. And I think we're headed to something similar to that. It's gonna take a little bit to recover. And if we're smart like we were back then I think we'll recover more quickly. Um, but, you know, back then no one told us Go in your house and stay there. Don't do anything for months. But, um out of all of that, a lot of unemployment occurred across all segments of the United States. One of the place, one of the segments got hit the hardest was attorneys. And so that was when the world changed and small employers started getting demand letters from attorneys. As you are the smallest thing that they would have never heard from in the past. It just was unheard of that some dentist and Louisiana would get a demand letter for $35,000 from a lawyer over misclassifying and employees and not paying him overtime properly for the last year. Right? So that comes stuff started popping up, and that's where we really shine, because we understood how to send those people packing. Yeah, and I think we might see a little bit of that coming back in the coming in the coming months, though, having policies that are correct and doing your utmost not to just follow these new rules, but all the different state rules and policies and city rules on sick leave and all those things that are in place. Now I think it's gonna be super important for your listeners. I think they kisses. This is an important point to make going forward.

spk_0:   23:21
Well, 100% agreed. Now listen, I've lost all my hair because of having to think about things and maybe sometimes trying to d i y it, in my opinion and for us. And I'm talking maybe biz owner to biz owner. That's watching this. I'm not the i wind. This is just not It's not gonna be where I'm at with this. I don't want to deal with it. Um, now Cedar and Paul, I'm friends with him, So he is who I'm going to. But there's other solutions out there. I don't want you to feel like this is the one. And if it is, that's the type of guy he is. But this may not be the time for the reason. He just said, and I could think of another a few other reasons that that when this thing does rebound, it may not rebound in the in the old way. We might be a new a new way that we need to be protected of our cash flow. So, yeah,

spk_1:   24:07
just all the money is gonna matter if it's always that way. When you go through a crisis is a business owner. It always starts with. Do I have enough bandwidth and enough money to get me through whatever is going on right now whether whether or not you have a building burned down in the middle of the night or, you know just whatever goes on in your community. So but let's, uh, let's move back to policy. Great remote work. Our early guide in store members was, Here is everything you need to do, and we gave him a list. I'm sorry. Here's everything you need to d'oh and do the best you can right now, Just just But please reach of this list and kind of pick out the things that would be, um, you know, most protective over you and best communicated to you employs a lot of it around off protecting protected health information. So now that we circle back, we highly recommend that everybody put a policy in place for remote work. A general policy, um, which includes a lot of the security measures and that you, you know, we were before we were saying, Well, if you don't have enough, laptops were not saying go out and buy a bunch laptops for everybody. So the gem work Laptops at home? Um, you know, we were just kind of saying you're gonna have to do the best you can. Now that time has passed. It is. I think it's important that you get your I t departments involved off and you get your own equipment and your employees hands. I am. You get your ducks in a row, because again, I think that you may have to have intermittent working home situations. I think you're gonna have this type of situations thrown at you throughout the rest of the year.

spk_0:   25:47
Yeah, it's fascinating that you say this now. This is dental whale here and done a whale owns a company called on Lim Tech. And we have had internal discussions about this very thing that you're talking. You know the need now to to really upgrade the offside I t infrastructure. So should that become something you want to follow? Just know that there is a solution right here with a limited, and I'll make sure at this as this goes through it, we'll add a link there in this email that you should be ableto to see what that link is and have context. But it's fascinating. It's fascinating how our whole business and what was important is changing through this.

spk_1:   26:23
Um, can I get that from my members, Tim? Exactly. Okay.

spk_0:   26:27
Absolutely. Yeah. Well connected. All Andi, they're fantastic. And they've been working hard doing this for, you know, a lot of dentists so far that are a little bit on the front edge of this, but and I don't want to do my glue, so I try not to be doom gloom today, But it could be possible as you alluded to. This is the first time in 2020 that we go through this and here in November. When you go, it's the second time we're doing it. Who knows? But if we have our i t ready to go, it won't be as big of a as big of a shock. So

spk_1:   26:57
him cedar was ready and tested before anybody in the United States really saw what was going on. We took a different tack to this. We we could see it was coming and the difference between it really made a difference. We were up and operating remotely and stress tested everything, and we're doing just fine right now. We just handled in amazing deluge of requests. Must imagine all your patients showed up at your door one morning and went I need this to full. Now. I'm an incredibly bad pain only what to do and kept coming back to your door every day for three weeks. I mean, and so that speaks to just getting some of this stuff out of the way. So you're prepared. He who is prepared to weather the storm better.

spk_0:   27:45
Absolutely. I'm not surprised knowing you that that you guys were seeing it differently and ready to go. It's It's again. You've been a resource to me before this became upside down world. You've been a huge resource to me now, so all right. So, policy. Now do we need a whiteboard it out? Or do we just need to know we need to have a policy and can you weigh alluded to this? But can you put together a policy that I can download and make sure you get a signature on it and I'm done?

spk_1:   28:09
Yeah, Tim. And if they're everybody's watching this like, today or tomorrow. If you guys get this out pretty quickly. It might take us a couple more days because we're refining it for our members. Right now, we're gonna give you the same policy that we give our members that you can share with. So absolutely, it will have some customizable places in it. And then much like we do when we do a policy around bonuses and stuff, we write a generalized policy for the handbook. That should never be changed. But, you know, some of your people are gonna be doing some things remote, and others will be doing other things. And then again, some employees what we've worked remote it all because it just doesn't make sense for him. So

spk_0:   28:45
that's good. Okay, well, all the biz owners and myself that are watching, we're turning our brains off on that. We're gonna lean on you to give it to us, and we're just gonna distribute that. So absolutely, Your court man should save us.

spk_1:   28:57
Okay. All right. So I think now, um, Tim, we could move into some S p a p p loan versus E i pl because you told me you're still seeing a lot of questions about it, and we have some recent guidance from the Treasury. I told everybody I told Tim before we got started here. I've been sharing a lot of information about these loans because it's so related to employment in HR and our employees. I'm thankful that slowly but surely and get me to back out of this role that I'm began, I'm able to turn this back overto your C p A's in your financial planners. But I think I have some business strategy conversation for you here that you can take to your C p. A's and you can also use to make your own determinations on what you want to do. Our lungs.

spk_0:   29:49
Well, I am still confused on this. I'm so confused. I can't even write the happening right now.

spk_1:   29:55
E I t l

spk_0:   29:56
all right. So I'm still confused on this. I am hopeful that you can walk me through this and I can understand which one I should be doing. Show me doing both. How do we do it? What is it? Well, your knowledge,

spk_1:   30:08
I think you're gonna at least be better prepared toe, make some kind of a choice and understand what you're getting yourself into. I think a TTE the top of this. I want you right across the top. I have no income coming in it. Look, if to some degree you have some income coming in, I still want you to embrace the zero income models right now.

spk_0:   30:36
Right? Good. Yeah. No revenue is a bad thing. Let's let's make sure we get that that cash and that we are a business. When When Corona goes away, We still are a business.

spk_1:   30:45
Yes. And if we borrow money, we typically borrow money because it's helping us to generate income. That's what we do. We borrow money to get build more opera, Tory's tow by buildings toe, see more patients to do more advertising. I don't think anybody should be expanding right now. I do think you shouldn't stop advertising. Um, but you guys get where I'm going with this. Typically, when we borrow money, it is to get something back for it. And we everybody knows that if you just go out, borrow money, you don't have a way that get getting comeback that, um well, it's problem, right?

spk_0:   31:26
Yeah. You? Yeah. And so I'm gonna break this down in dentist speak. Cash flow matters and one way to increase cash flow is too leveraged debt. And in this particular case we have two fantastic opportunities toe leveraged debt. And so, as a smart business owner, we should be taking advantage of this and not be shying away from loans or debts. Death opportunity like this,

spk_1:   31:52
right? This is something that you need to look at, and then you need to take a strategic approach. And there is different strategies for these two different types of loans. So let's let's do E I p. L first, because it's so easy.

spk_0:   32:08
Yeah,

spk_1:   32:09
this is a an emergency loan that is available to disaster loan that's available. It becomes available anytime there's a disaster. So it could be called the Louisiana Flood Loan when it's there or whatever this long is. Something that you apply for there is. You have to qualify for it. There is a credit check you have to give all your financials. It's quite cumbersome. Um, it takes time. You can get a small bridge loan or grant in. It has been much talk about the $10,000 forgiveness of inside of this loan. Um, if you apply it to payroll, um which would be kind of hard to do right now because you have people on unemployment.

spk_0:   32:59
We have the opportunity inside of a pl to be granted, $7000 is forgiven from alone. Should go to a certain category this category B right and do well is this great guarantee? What am I gonna If I can prove that I paid for payroll and I'm gonna get it or my I win the lottery.

spk_1:   33:18
You know, I think you have to prove what you spend it on. I'm so there's no $10,000 lottery. You remember the old waiting Murphy joke? There's no sex in the in the ship and crew. Oh,

spk_0:   33:30
that's so so I should be thinking if I have applied for this disaster loan, hate is gonna take some time. So I need to get on it now. Yeah, through this. What I what I give him? We'll go to the loan terms. You're in a bit, I'm sure. But through this, if I could prove that I did this to payroll, I have a better not guaranteed but better than likely opportunity tohave $10,000. Forget?

spk_1:   33:52
Absolutely. Okay. And remember, everybody. We're just talking high level here. There are details that go down into this that you're C p a cancan Say, Well, no. There's three other options here for this 10 K, and this is how you could get it. We're just staying very high level right now to explain it. Everybody Okay, the next thing that's important is this loan is secured.

spk_0:   34:20
Write that down for me. And let's say I don't know what's going on when

spk_1:   34:24
I when I secured means you got to secure the loan. You have to put up something for it. When I used in S B A loan to purchase our building about a large building because we kept outgrowing it, um, I I had to sign over my house. I had it. My wife at the time had we all had to get personal loan guarantees, and it was beyond even a student loan as faras what they could do to get their money back if you defaulted on the loan

spk_0:   34:55
personal guarantee. So I'm glad you went there. So, um, I have a question on this and make her gonna get to this. But it is based on disaster, and I always say we're gonna be able to prove a disaster right now. Is this going to be based on income? Or let's say I have a lot of money in the bank. Can I still go and get this loan?

spk_1:   35:15
Yeah, I think so. It's gonna be based on your past income. I think they're gonna have to because it's a disaster when they can't really consider your income. Maybe for the for the length of the disaster. But they're gonna look back and you're gonna be limited by those things, which is a good thing. I mean, you know, it's a good thing, and I and I believed alone These loans run from his little asses. You know, a few $1000 tow tens of thousands of dollars that you can get based off of what what you need is, and then they're typically turned out for 10 years, and they're usually at about 4% interest. And they're done through your local bank most of the time, even though you may apply at the S P. A. Generally, where most people get their SP a learns is through the bank. I know the S P A has some loan forms up on their website, Fourie. I pl loans you right now you've tax the limit of my understanding of what's gonna happen when she start to apply.

spk_0:   36:12
Yeah, and I was just going to say this again. Everyone recognized we're trying to get basic information into you. This we're starting to cross over in the CPI. A land and banker land. You have one of those Take your gotten. You show up with a lot of knowledge and they're gonna get your toe to the finish line.

spk_1:   36:27
Absolutely. So now let's move back to triple P. By the way, the strategy of the E I P L alone is long term. It doesn't matter as much that you have zero or less income coming in right now because you have 10 years to pay this back. And presumably even if this thing were to go on for a year, at some point, you're gonna pop out on the other side. Off course. You're paying 4% interest, you know. But at some point you're gonna pop out, you're gonna be a blue at, you know, recover and pay this money back. And by the way, this is one more burden debt burden on top of your business that would live on it for the next 10 years. That probably nobody who's listening right now budgeted for plan for or could even see how they would pay back this loan. You know, one, you know, take one more dollar off the table out of their families mouth and put it into this loan. So, like all loans, proceed with caution and clarity.

spk_0:   37:27
Absolutely. And and I don't know if I might take us down a rabbit hole here, but one of my favorite things about business. Now let's let's socially, let's ignore the Deco. The Corona virus is very scary for a lot of people in it. It's really for a lot of people and maybe people watching really closely affected by this Down aside in business, there is these three shifts in your business that you weren't expecting for, and you either can kind of wilt under the pressure. Or you can say, Oh, business is actually like chess, and the world just just tried to checkmate me. But I'm not gonna let him do it because I got resolved. I got grit and I'm in business, and I'm gonna win on this. So we were planning for this type of loan, as you just said, Our balance, you. But you know what? This might be exactly how you get through 90 days and then start winning again. It's

spk_1:   38:22
absolutely It could be your It could be the right choice for you on, particularly because it's there's low pressure on this loan to get it paid back immediately. Um, I like longer term. I could make a different choice about paying something back sooner. And it's like, you know, a lot of people get a longer mortgage on their house and then make bigger payments. I mean, you know, e I'd like to be in choice.

spk_0:   38:47
Flexibility. Okay. BBB, what's it stand for? And where we're going on

spk_1:   38:52
this is the paycheck protection. Uh oh, gosh. No, no. I got a look at my nose.

spk_0:   38:59
I set you up. You know, it's funny you said it three times before we started here. So,

spk_1:   39:02
paycheck protection program. That's what I knew, where it goes. And this comes with the Cares Act. We have some guidance from Treasury that she so when we looked at the law, the law said that they couldn't charge more than 4% and that they could give up to a 10 year term in order to pay the money back. Kind of like, you know, kind of going by what the SDA says. But Treasury came out overnight a couple of days ago and said, No, if you have to convert any of this toe non forgivable and we'll talk about that again, you're going to have two years to pay it back and it's going to be at 1/2 a percent. So it's a much lower interest rate, which sounds good at first until I explain something that I learned from some CPS the other day.

spk_0:   39:52
Okay, so for the bullet point, I was gonna put turns up here. But now, probably like everyone else out there, I'm a little confused on the term. So it sounds to me like the term is two years and the interest rate is 20.5%.

spk_1:   40:05
That is true. Okay, that is true. Okay, So if you remember what we discussed last time, if anybody missed it, you're going to go back to Theo the previous year. Average your, um your average A payroll. You're gonna establish a one month payroll average, and then you're going to be able to get a loan for 250% of that amount. So average payroll is 25% of your gross, And then, you know, you're probably, you know, let's just say your payrolls $25,000 a month. Let's just call it that.

spk_0:   40:54
Is that average established from my 2019 averages that averaged established from February

spk_1:   40:59
19. Unless you just opened. If you just open, then I think you can use January to February,

spk_0:   41:05
right? Okay.

spk_1:   41:05
We're January February. I think you could use either one. It's you're CPL. Guide you through, which is the best one for you.

spk_0:   41:12
Okay, so we've got average payroll times 2.5?

spk_1:   41:19
Yep. And by the way, you can include independent contractor income. And as I understand it now, the CPS have figured out how to get the doctor's income in it.

spk_0:   41:30
We're just got excited

spk_1:   41:32
on

spk_0:   41:32
your phones everywhere reading right

spk_1:   41:34
now. Yeah, yeah, yeah. Says

spk_0:   41:36
Doc Income. And I'm gonna put a question mark on a question mark. Next independent contractor. Both of those exciting news for me right now. Yeah, in this thing and call comics, Have you?

spk_1:   41:47
Yeah, I know. Exactly. I'm We're done. Pull him out. Okay, So what you're also going to do is establish number of employees, and this is very important. So you can establish a number of employees that you had during this period. So if it was you and an independent contractor and 12 employees, then your number is going to be 14. Okay, that's that's very important.

spk_0:   42:12
My running out of white board room here is You're looking at it.

spk_1:   42:15
Uh, no, no,

spk_0:   42:17
no, girl. Just see what I'm writing. I'll take a picture of this later.

spk_1:   42:21
We'll have three lines. Um, you're gonna need more white board.

spk_0:   42:25
Oh, all right. All right. We'll jump. Will erase E i p up.

spk_1:   42:31
So the next thing is is that if you that once you get the loan and this is new information we had really hoped and there was indications that we were gonna be able to delay receipt of the money because once you get it, the clock starts ticking on an eight week period whereby you have to use the funds and in specific ways. And all of the loan were most of the loan will be forgiven. Okay, with weights.

spk_0:   43:03
So I'm gonna reek a recap that and then to speak. I have a specific thing I can use PPP for. I believe it's payroll, rent, mortgage rent or is a mortgage interest, I think, And then? Or and or rent And then Pero and no one missing some other stuff.

spk_1:   43:21
There's a couple of other very limited things. They're they're very much, you know, focused on health insurance and for one k contributions. And still I was very, very people focused.

spk_0:   43:34
So I have this amount that I've, you know, gotten 2.5 times my average, Pero I can apply it to certain things. But what you're saying is that the moment that money hits my account, I know have to spend it in a certain amount of time.

spk_1:   43:47
Yes, you have eight weeks in order to spend it.

spk_0:   43:51
And I just throw out what what might be a ah problem that maybe you already are aware of and I am seeing immediately upon hearing this is that this might go longer than I need. And I actually have to extend this. Oh, my God. Saying that goes for three months you may run out of this loan quickly,

spk_1:   44:10
very quickly. So this loan requires strategic thinking and there's something going on. And this is for everybody who's listening right now. This is special for you being in here. The feds, the Treasury put this announcement out yesterday, and they created what I believe from, you know, from studying again. This is my personal business. Uh huh. Feelings about this, Mike, my insight. I believe that they created unrealistic sense of urgency. They said, Get out there and get this loan. And when I feel like is that's a trap for most of the dentist who are listening right now. Because if you pull your people in order to make this loan forgivable all the way and we gotta talk about this, you're gonna pull your people off of unemployment, and that includes yourself and probably your spouse. If you've done good financial planning, you and your spouse or un are able to apply for unemployment. So you gotta pull everybody off unemployment and put them back at work where you can't put him back at work. So we could do is you could pay them to sit home. Well, that sounds fantastic, But remember what we put at the very top zero income coming in. So would you rather the government be paying your people 600 plus their state unemployment? Or would you rather borrow the money and take the and supplant what's going on in the world and then be on the hook for paying it back?

spk_0:   45:44
Yes. So that's exactly what I was. Just what it would hit me like lightning when you were talking is now I need to have strategy on. Actually, when the loan hits my bank, it means I need that strategy on when I should apply for because I have no revenue. Right now, I have zero income. So if I am bringing everyone off of unemployment in order for this to be forgivable, forgivable, I have to start spending this money immediately. And should this go three months or four months, all of a sudden I'm in the exact same situation 90 days from now that I'm out right now where I'm laying people, often sending them back home because I don't have any more money to pay.

spk_1:   46:19
That's that's that's correct. So how this loan works briefly is 75% of it is has to be earmarked for your employees. That's why it was 250% and then another 25% you can spend on those other things that they allow that are very, very limited.

spk_0:   46:36
That's good to know that right here, 75% versus 25%. Make sure that you understand that because the worst thing you could do is screw this up and then have parts that are unforgivable that are paid back in two years,

spk_1:   46:50
Right. Okay, so now you have until June it's Have you got the loan today or tomorrow or next week? It starts taking, and you have until June 30th to put all of your employees back on. So you got to get your head count back up for every employee that you don't bring back on it. Dean's the forgivable part of the loan, including the 25% that you can spend on other things. Okay, so it becomes less forgivable loan and especially so if you are not open. So in strategizing with our we're talking King waters down in Texas, we're talking to all kinds of C p. A's in strategizing here we don't feel like this be peopie loan is come for a business that is not open. It's It's for businesses that are up pretty much operating 50 75% or more. Remember, they didn't do this for the dental community, the ticket for the country. And so I hope that wasn't too confusing it up to that point.

spk_0:   48:03
I don't think it is on. Maybe I'll summarize it again. Their strategy and timing here. But this is still a good long for you and a good option. But you need to recognize as soon as you take it, you have to bring everyone back. And if you don't have any activity for them, have a plan for them. Because maybe you decide. You know what I believe in, Um how long route? How long did you say you

spk_1:   48:27
have? Eight weeks.

spk_0:   48:28
Eight weeks? I don't know. September. You have eight weeks. So if you believe you're gonna be back at eight weeks, this makes sense to put them all on training. Make your business better. Use that downtime. We come back and revenue skyrockets and rebound and everything has worked out perfectly. If you are completely closed, you may want to strategize this and apply it in three weeks. If you believe the end of the you know when you're opening again is on that time. So I think that's pretty straightforward. And it's fantastic information because people are racing right now to get this and they might not be open in time to to do this. So,

spk_1:   49:03
you know, and here's the thing I remember we talked about choice in the E I P l. Alone and having it out for 10 years, and And that that let us kind of understand that over the next year is this thing goes like this and maybe comes back. Those loan payments were still in a sock. No financial terms. They're still gonna suck. But you're going tohave years to bounce back from that. Then I make up for it. In this case, the clock's ticking again. Whatever is not forgiven has that you're gonna get six months of deferment. You'll still be paying the interest, but or will be accruing. And then you only have 18 months past that to pay that money back,

spk_0:   49:46
right? Right. Does the term is two years, so this is fantastic. And this please. Me too. What? I think it's important and I don't wanna make an assumption. Before I write it, I'm gonna put it in and or here, right, Because you could do both of these loans. It's not one or the other.

spk_1:   50:05
I That is my understanding that one will not prevent you from getting the other again. You know, your debt service you're getting You're getting crazy there. So I want I want the doctors just to hear this math real quick. If you in your wife are on your payroll and you're collecting unemployment and you look at this loan in your and you are like me, there's no way in hell I would bring my employees back just so I could pay them through this long. I'm gonna keep them on unemployment. So the So what's gonna end up with is that the forgivable amount is gonna be almost equal to what you can get from the from the state through unemployment, and then you're gonna end up with this unforgivable amount of which then there's some argument about Well, then I got this really low interest unsecured loan. Nonetheless, you have a loan of somewhere between 2500 and $4000 a month, and you're gonna have to start paying on because it's only for two years. And I'm not sure that that's a good thing,

spk_0:   51:10
Right? Right. If it's not, forget if you end up with having some amount here that does not forget,

spk_1:   51:15
which is what's gonna happen if you're not open. So have numbers, Tim, these are numbers that we can put on the board. This this be something that they can take. Two there they can take to the mat on this I'm gonna do is I'm gonna give them an 86 and four in two weeks scenario on race. I think you should erase it if everybody's got it. Yeah,

spk_0:   51:46
you know, it's funny, like I have no idea if people can see this white word or not. They also don't know I'm in slippers right now. This is the Corona world.

spk_1:   51:55
Let you do it. You have started asking presenters that they're wearing their pants before

spk_0:   51:59
I am. I am on that just I'm in summers. I

spk_1:   52:01
have pads on too, I think,

spk_0:   52:05
Um all right. Hit me with the man.

spk_1:   52:08
So now we're looking at the triple P. And we're just going to give you some averages that were pulled. This was shed with us by Kane Waters, and I think it's a pretty good thing. So right down on the board. 864 and two down. Yeah, A column. Yeah. Okay, on. And that's eight weeks. Six weeks, four weeks in two weeks. All right, Next to, um and then so go in the next column. And this is the last column and put at eight weeks. Put 50% at six weeks, Put 60% at four. Put 70 at to put 79%. Okay, so this is going under the supposition that you may have a couple of people working very short, part time hours, maybe coming in doing a little emergency work with you here. And they're they're doing some administrative stuff in there, answering the phones. If you were to take the loan at eight weeks and you were to pay yourself and some of those expenses that it allows you to pay 50% of your loan will likely be forgiven. Okay? At six weeks, it goes to 60 at four. It goes to 70 and it too it goes to 79%. Okay. Like to have 79% of my loan forgiven. I can stomach 70. All

spk_0:   53:47
right? Right. So collected this for me a little bit deeper into my my business mind here and people that are watching this.

spk_1:   53:56
So I go out and I apply for this loan tomorrow. My business doesn't open for another 8 to 10 weeks. Then hardly any of this is gonna be forgiven. And my overall strategy might be to keep my just stay away from this loan that might that might be my best strategy or toe wait and apply for the loan and hope that the Treasury is wrong. And then if I apply for it in four weeks because I think I'm gonna be able to open four weeks later or two weeks later that that's all gonna work out for me and that the money will be there. The other thing, too, is And this is a nugget, Man. You guys getting nuggets, Your C p A can watch the treasury. They can watch this fund and see if it's being depleted as quickly as as everyone says it will

spk_0:   54:41
be. Yeah. No, This is fantastic. So, um, I think I think the takeaway here is that you've got three options. You got three strategies here. You've got your p o. You got BP. You've got unemployment. You've got all your employees, and you need to start thinking and having some sort of strategy with your c p a, your banker and Paul and cedar or whomever your HR is. And just make sure it's all connected so that your plan matches your opening matches. Your rebound expected rebound. Um, I think this is fantastic information, man. This is great. You have Ah, you have any other final thoughts on on? We went through a lot today. So any other final thoughts to summarize it to wrap it up?

spk_1:   55:24
You know, strategically, I think you want to be careful about the triple P loan. Don't think of it is just alone on live off of your unemployment and you're you know, whatever income you have coming in for a long as you can. I hope that the loan will still be there for anybody who applies for 46 weeks from now. That's that's the thing that I can't Nobody has a crystal ball on, right? Everything we've talked about today, it's stuff you're gonna have to deal with over the next year or years. No, no,

spk_0:   55:56
no, it's fascinating. And we're, you know, let's compare to what we were talking about last week. You know, we were further away from the finish line this week. We're getting there, We're getting closer. So maybe a week from now, we have even more clarity on what appears to be confusing today, um, or not. Appears absolutely, is confusing today. And we just keep going and, you know, business owners, the business owners out there, This is part of the game, you know, embrace the suck. Like this is part of the game. Just, you know, this is it. This is it. So figure out your strategy and protect your employees. Protect yourself. Make sure the business is still gonna be able to open when this is all done, and it's just part of it. And you're not alone. I'm going through it all the way through it, your local restaurants going through it. It's not just isolated to you. So keep sharing knowledge. I would say HR base camp is a fantastic place. Get into their keep learning, keep sharing. And I have no doubts that there's gonna be a big percentage of dentist that are gonna come out of this brighter and better. And, uh, and I hope that I could help him. And I know Paul, you're helping to To make that happen.

spk_1:   57:00
Yep. Absolutely. It's

spk_0:   57:01
a very much for your time.

spk_1:   57:03
Yeah, Tim, Thank you. And thanks for, uh, for all you're doing for your for your members.

spk_0:   57:08
Yeah, You bet. All right. Thank you.