5/16/20 UPDATE: The Paycheck Protection Program has already seen its $350 billion snapped up by small businesses. Congress is currently trying to come to an agreement on how to provide additional funding.
Let’s get to the point: we’re living in unprecedented times. For anyone who’s running a business, things must seem especially uncertain as you wonder how to keep your staff healthy, your customers satisfied, and your revenue up.
We’re here to help you out with that. Today we’re talking a bit about the CARES Act, better known as “The Stimulus Package.” There’s a lot in this package (seriously, it’s several hundred pages long) and we’ve broken out the portions that are most relevant to repair shops.
(If you’d like to read the entire bill, you can do so here.)
One quick disclaimer: Always go to your legal and/or financial team for advice. We’re just here to pass on high-level information and root for you along the way.
So let’s get to it!
What’s this stimulus package, anyway?
It’s almost $400 billion in loans for small businesses. There are also billions set aside to help business owners handle operating expenses and to allow owners to back off on paying existing loans if they cause hardship.
Caveat: There may be affiliate rules that cause problems (if you’re partially owned by a larger company, for example) – always check in with legal before doing anything.
How does the stimulus help my shop?
We’re going to zero in on the $350 billion allocated to the Small Business Administration (SBA). They’re going to disperse a lot of that money through the Paycheck Protection Program, which can ease your operating expenses and help keep people on the payroll.
What is the Paycheck Protection Program?
The spirit of the PPP, in the words of Mark Wilson from Find a Wrench, is a bill that “tides business owners over for a couple of months to allow them to keep people on payroll.”
It was designed so small businesses that may be seeing a downturn in income (and are considering or already are letting people go) can keep those people on and their doors open through the next couple of months. Hopefully that’s when we can come out of hiding and kick-start the recovery process.
How much is in this loan?
The loan is up to 2.5 times the amount of your monthly payroll – the cap is $10 million. Bear in mind you may have to make some adjustments for high-compensation employees.
Will this cover salaries?
Yes. The point of the program is to keep your existing shop staff employed.
How long does it last?
Eight weeks. That’s eight weeks of up to 2.5 times the amount of your average payroll. So if you’re spending $100,000 a month on payroll, you could end up with $250,000 for those eight weeks.
There are additional stipulations that you can read up on here.
Yeah, but I have to pay this loan back, right?
The short answer is… “Maybe.”
Generally speaking, if your loan is put toward maintaining operations and keeping your current staff aboard, large portions (or even the entire thing) may be forgiven.
How does this work if I’ve already had to lay people off?
Mark broke it down for us a little more. Your story will be different if you’re a newer business – check with your legal advisor or the SBA itself – but basically your loan amount is based on the average of your 2019 payroll. You’ll receive up to 2.5 times of whatever that number is.
If you had 30 employees in 2019 and laid off 25 of them in 2020 due to the pandemic, “They’re only going to forgive the portion” that goes to the five employees you have left, along with mortgage and/or rent and utilities. If you want more of that loan forgiven, you need to spend more of it on payroll – you’re being incentivized to hire people back.
So is this a grant?
If you’re able to keep your staff employed, then you could kind of look at it that way.
How do I get this loan?
You’ll go through your bank. No personal guarantee necessary; no need to prove you can’t get the money elsewhere. They’ve eliminated a lot of the paperwork surrounding an SBA loan.
When can I start applying?
April 3, 2020…in theory. The latest reports have banks issuing warnings that they may not be able to keep up with the rush. Monitor the situation (we’re doing the same) and see what happens. It will get straightened out – you may just have to wait a few more days to apply.
What do I need?
The SBA has a sample application form. You’ll need to contact an SBA loan provider – they’ll answer specific questions and help you determine the best way to apply for a loan, if that’s what you should be doing.
You may also want to talk to your accountant and gather other necessary forms, like Form 941 (last quarter’s total payroll).
The best thing you can do is get in touch with the SBA and let them guide you.
Taking Care of Business
Maybe you’ve got your loan. Maybe business is still brisk anyway – repair shops are especially important right now as we keep supply lines open. You’re no doubt watching the news and wondering how you can keep your techs and your shop healthy.
Stopping the spread
- Minimize your contact with customers. Handle as much business as you can via the phone or the customer portal. By the way, you can send pictures of damage/problem spots through the portal, so that’s an additional line of communication that doesn’t require touching and/or breathing on each other. If you absolutely must see someone face to face, do it outside your business.
- We like this tip from TruckingInfo: If you absolutely must get a physical signature, let the customer keep the pen. Pro Tip: Slap your shop name on it.
- Don’t touch anyone. Don’t shake hands. Smile, nod, and keep good social distancing while being friendly and courteous.
- Clean and disinfect high-traffic places. Make it someone’s job. Maybe it’s part of your job now. The CDC doesn’t suggest how often to do it, but assuming you’ve got people moving around, you might want to take Lysol wipes to certain tools and surfaces every half-hour.
- Door handles/doorknobs
- Light switches
- Sinks (faucets)
- Computer keyboards/tablets
- Soap dispensers
- Communal property like cabinet doors
- Frequently used tools
Protecting your staff
- Cut down on stand-up meetings. Maybe you can send an email. Maybe you can yell across the shop. The bigger the group of people, the more chance you have to spread things.
- Stagger breaks and lunchtimes so people aren’t tempted to congregate. This sucks, particularly if you have a tight-knit staff, but we’re in extraordinary times.
- You may even want to adjust hours; if you have five techs on staff from 1-5, maybe make it two techs and extend your hours from 1-10.
- Wash your hands. A lot. All of you! The CDC recommends 20 seconds with the soap. What’s your favorite song? Listen to 20 seconds of it. Memorize those 20 seconds. Sing it as you wash.
- Disinfect vehicles before you get into them. Go to town with wipes or sprays. Door handles, seat belts, steering wheels, dashboard, everything.
- Wear masks…if you can get them. There’s a lot of back and forth on this. The most up-to-date advice is that masks need to go to front-line medical workers, but if you can get one, use it! Another option is to use a bandana or homemade mask.
- Really understand your shop’s numbers. You should have a good grip on these, anyway, but with business potentially taking wild swings upward and downward, Mark stresses how critical it is to have clarity on your expenses, particularly as you keep people employed and possibly try to get financial help.
Keeping Up Morale
Yes, things feel pretty crazy right now. We’ve put together a few things you can do to help keep spirits up at your shop.
- Listen to the concerns of your staff. Take them seriously. You may not be able to fix everything for them, but knowing you’ve got their backs will go a long way.
- Adjust hours as necessary. Be flexible. Regular life has been disrupted; your staff (or even you!) may need to be at home for certain portions of the day to watch kids, for example.
- Keep some food on hand. Times are tight. It’s hard to find essentials at the stores. If you can get your hands on non-perishables like beef jerky, nuts (disclaimer: watch out for allergies), or granola bars, go for it. You may look into food delivery services or farm boxes that deliver business-sized amounts of meals. Remember to disinfect all packaging, and wash any produce you obtain with soap and water!
- Help each other out. Does someone need time off to look after a sick parent or child? Let them have it. Is someone feeling sick? Send them home.
While you’re looking after your staff, don’t forget to look after yourself. As a shop owner, you’re in a weird place right now. You want to be reassuring, of course, but you’re likely nervous yourself.
“If we all knew this would end in two weeks, or a month, you could plan for it,” Mark says. “But you don’t know. That’s when it can mess with people’s heads.”
Trust us: everyone is feeling the same way. Mark recommends talking to other shop owners (and other small business owners) and hearing out their thoughts and concerns. As our CEO Jacob said last week, we’re all in this together. Every last one of us.
So reach out. Talk to people. Remember that none of us are alone, even if we are standing six feet apart.
This too shall pass, and we will emerge all the stronger.