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Fermented Strategies - Some Thoughts on the PPP and Other Programs - Issue #22

April 18 · Issue #22 · View online
Fermented Strategies - Craft Brewing Industry Newsletter
As you already know, the Paycheck Protection Program exhausted its funds on Thursday.  While some may have received the loan funds, there were many small businesses that were not able to get these funds.  I wanted to take this opportunity to talk through what our thinking is here and where we should go from here.
If you did get the PPP funding, its time to start thinking through the forgiveness of this loan
The big benefit of this loan is that if you use it as it has been intended, you can get it forgiven.  That means you need to be tracking any dollars that qualify for forgiveness. Each bank is taking a different approach here and as a result you might be getting information from the bank that is different from what others are hearing. We are still awaiting final guidance from the SBA on how the forgiveness will get applied for, the process for doing this, and how any limitations of forgiveness will happen. Since this is the SBA administering this, it is important to note that accuracy and details are important. The SBA or your bank could deny you for forgiveness if you don’t have the details to support it.
If you did not get the funding, there are few things to be thinking through right now.
  1. It is likely (but not guaranteed) that Congress will refund the PPP program with another $250 billion dollars. If the PPP loan is still something that you believe is necessary for your business, make sure to continue to work with your bank or find an alternative lending institution.  Some banks are continuing to finalize applications and getting them ready to process once the program is funded again. I know big banks struggled here and if you did not receive a loan from them, you might want to look at alternative lending institutions, particularly non bank SBA lenders.  Paypal and Square came online for SBA PPP loans this past week and have heard of some success with people applying and getting funded through them
  2. If you are not sure the PPP is right for your business or concerned that you might not be able to have the loan forgiven due to laying off staff, then the next option to look at is the Employee Retention Credit. This credit is applicable to your business if you had to shutdown completely or partially due to government order OR if your revenue is down 50% or more from the same quarter last year. This credit can get you up to $5000 per employee depending on amounts paid out.  More details can be found below in our video over ERC and you can do your own calculation as to whether the ERC or PPP is better for your business. You cannot do both the ERC and the PPP at the same time.
  3. While the PPP is a good program for some businesses, it’s not going to be the right tool for all businesses. If the PPP is not the right tool, then looking to the ERC and/or EIDL might be a better option to pursue.  We are seeing dollars start to flow from the EIDL program and expect those funds to continue to flow in the near future. 
  4. Continue to monitor and forecast (and reforecast your cash flow). Knowing where your cash flow shortages are and what is needed to fill those shortages is helpful knowing if the PPP or other stimulus mechanisms are required or necessary. Keeping track of your cash flow forecast and updating regularly is critical right now. Using tools like Futrli, Helm, Clockwork, Float and others like that will make this task easier to manage. 
Please reach out if you have any questions on these programs or need help deciding on what to do next. You can book time directly with me for office hours here:

Employee Retention Credit
PPP vs ERC Calculator - Google Sheets PPP vs ERC Calculator - Google Sheets
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