Tim Kinane

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Interesting Items

Thursday, June 25th, 2020

How Leaders Inspire Even in a Time of Crisis

I’m sharing a recent Inc. Real Talk Business Reboot Webinar with Simon Sinek.

Learn how to embrace an infinite mindset and strategies to lead your team through these difficult times and into the new Abnormal.

Inc SS

 

Inc. Real Talk Business Reboot:
Leading  Through Times of Crisis and Change

Sinek teaches leaders unconventional ways of thinking, acting, and communicating to help inspire those around them. He believes great leaders are the ones who think long term rather than short term. In today’s ever-changing world, knowing the framework for leadership is more crucial than ever.

What tools and strategies are you using to lead your team through these challenging times?

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Please share this with a friend/colleague

 

 

Tuesday, June 9th, 2020

SBA PPP How to Maximize and Beyond

I was a guest speaker on the inaugural Small Talk online series for the Business Development Board on Martin county.  The interview is from late April and the key points remain valid as businesses transition back to a healthier economy.

The topic was How to Maximize Your Loan Funds.  Along with reviewing how to best use SBA PPP funds, we discussed what to consider moving forward.

 

 

Key take away points:

SBA PPP Funds:

Keep communication open with banker and CPA.

  • Be proactive
  • Review options
  • Ask questions
  • Document expenditures
  • Consider immediate and longer-term cash needs
  • Multiple cash flows

 

Keep communication open with vendors:

  • Terms
  • Vendors are partners- you want them to be there to get you back on track

 

Businesses are resilient.

Generally, businesses need to find a way to react quickly to an issue or problem.

  • How much money is needed
  • What is the best way to spend money now
  • How to make the next immediate decision

That is great during the time of crisis, but it is important to think future down the line.

Employees

They are the one who helped to build your business to where it is now, they will be vital  to re-build your business.

Keep in contact- keep communication open.

 

Opportunities in times like these

Resilience of people in general, Americans and Small Business

Small Business is the engine that runs this country- Small Business is what will bring the economy back.

  • Step back from the problem
  • Explore all new opportunities as you move forward
  • Challenge employees and help them find opportunities

Contact Tim 772-221-4499, to discuss strategies for your business.

Monday, June 8th, 2020

PPP Loan Forgiveness Just Got Easier

By: Patrick Ungashick

Sick Dollar

 

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP Loan Forgiveness Just Got Easier

On June 5th, the new Payroll Protection Plan Flexibility Act (PPPFA) was signed into law, with the purpose of making it easier for companies with PPP loans to secure loan forgiveness. The new law was passed in response to widespread confusion and criticism surrounding the rules pertaining to loan forgiveness. The new PPPFA law is intended to provide greater flexibility to the loan forgiveness process, in order to help the millions of businesses and their owners survive the economic challenges created by the virus.

The important PPP loan forgiveness changes are:

1. More Time to Spend the PPP Loan Proceeds

The most significant change is that companies now have more time to spend the loan proceeds. Before the new PPPFA law, borrowers had only eight weeks (called the “covered period”) starting upon receipt of the loan to spend the funds. That pressured many companies to spend PPP funds more quickly than would best help them through the coronavirus crisis. Now, borrowers have until the earlier of either: (1) 24 weeks from the loan origination date, or (2) December 31, 2020, to spend PPP funds.

However, under the 24-week covered period, companies will have to maintain the number of FTE employees for about three times longer (24 weeks instead of eight weeks) to maximize loan forgiveness. To help employers address this, borrowers who received PPP funds before June 5th (when PPPFA was signed into law) can opt to remain with an eight-week covered period, if advantageous.

2. More Flexibility for How PPP Proceeds are Spent

The next important change is that the new PPPFA law reduces the amount that companies must spend on payroll costs to qualify for loan forgiveness. Previously, PPP borrowers had to spend at least 75% of the loan proceeds on eligible payroll costs. Under the new law, companies must spend at least 60%. This means that forgivable non-payroll expenses can now be up to 40% of spending, increasing from 25%. 

PPPFA also clarifies if borrowers are required to spend a minimum amount of loan proceeds. The new law clearly states that in order to be eligible for any forgiveness, a borrower must spend at least 60% of its total PPP loan proceeds towards payroll costs as defined under the CARES Act. Meaning, a borrower is not eligible for any loan forgiveness if it spends less than 60% of its total PPP loan amount.

3. More Time to Pay Back the PPP Loan

Another critical change is that borrowers now have five years, an increase from two years, to repay the PPP loan. The loan interest rate remains unchanged at 1.0%. 

4. Extended Safe Harbor to Preserve PPP Loan Forgiveness

The new PPPFA law expands the opportunities for employers who experience a reduction in employee headcount or wages/salaries to maximize loan forgiveness through several means:

  • Initially, PPP provided a “safe harbor” which permitted employers to avoid a reduction in loan forgiveness due to a significant decrease in employment and/or wage levels between February 15 and April 26, 2020, as long as the numbers of employees and employee wage levels are restored by June 30, 2020. The PPPFA extends this safe harbor restoration deadline from June 30 to December 31, 2020, giving employers six additional months to preserve loan forgiveness. 
  • PPPFA clarifies that loan forgiveness will not be reduced based on an inability to rehire employees if the borrower can document (1) written offers to rehire individuals who were employees of the organization on February 15, 2020; or (2) an inability to hire qualified employees for unfilled positions by December 31, 2020.
  • Loan forgiveness will not be reduced for borrowers who are able to document a failure to return to the level of business activity as existed prior to February 15, 2020, due to compliance with coronavirus-related guidance for sanitation, social distancing, or safety requirements from the Health and Human Services (HHS), the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration (OSHA) between March 1 and December 31, 2020.

5. Potential Longer Deferment of Loan Repayment

Additionally, PPPFA extends the loan deferment period for many borrowers. Under the previous rules, borrowers could defer loan interest and principal payments for six months (although interest does accrue during the deferment). Now, borrowers can defer payments until the SBA determines the loan amount forgiven for that borrower. Given the new 24-week covered period, and given that lenders have 60 days to act and the SBA has 90 days to determine loan forgiveness, this could significantly increase the deferment period for many companies. However, PPP borrowers cannot just stall filing their loan forgiveness application in order to extend the deferral period. If a PPP borrower fails to apply for forgiveness within ten months after the PPP loan forgiveness covered period (which is now the earlier of 24 weeks from origination or December 31, 2020), the deferment period ends, and the borrower must begin making loan repayments.

6. Payroll Tax Deferral Expanded

Previously, companies that secured PPP loan forgiveness could not defer their employer share of payroll taxes. The new PPPFA law now allows all borrowers that receive loan forgiveness to defer payment of employer payroll taxes under Section 2302 of the CARES Act. (The payroll taxes typically due between now and through December 31, 2020, may be deferred with 50% payable by December 31, 2021, and the other 50% payable by December 31, 2022. Similarly, a self-employed taxpayer can defer paying 50% of his or her self-employment tax that would be due from now through the end of 2020 until the end of 2021 [25%] and 2022 [25%].)

However, keep in mind that this payroll tax deferral is different from the CARES Act employee retention tax credit. The PPP and the employee retention credit are still mutually exclusive, and companies may not apply for one if they use the other.

PPP Loan Forgiveness Application

To secure loan forgiveness, borrowers must complete and submit to their PPP lender the Small Business Administration (SBA) loan forgiveness application. Borrowers should carefully review the 11-page application, and consider the various definitions and options under the loan forgiveness process. Business owners are encouraged to consult their tax and banking advisors. 

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

Contact Tim 772-221-4499, to discuss strategies for your business.

Thursday, May 28th, 2020

Communicating in Times of Crisis  Part 2- D Style

As we continue living in highly stressful times; I hope this message finds you well.

Now that so many of us are working remotely, we are finding communication much more challenging. Even with video conferencing tools, it is still difficult to observe and process all of the nonverbal cues that we used to depend on for communication with coworkers, customers, and vendors.

This is part 2 of Communicating in Times of Crisis- focusing on the D Style in the Team Strength DISC Tool.

DISC EIQ APRIL 2020 d

 

A decisive and ambitious person can become more aggressive and confrontational when things are out of control.

EIQ individual profiles hi low D

 

D Style

  • decisive

  • ambitious

  • results driven

  • likes being in charge

When we identify and control what is likely to stress us we can better react with thoughtfulness.  (That is a good time to take a nice, deep breath.)

It is OK to understand and accept that we are under stress and not in a comfortable place.  That will start to refill our emotional bank account when we need it most.

D Style

Emotional/Reactive: “If you can’t stand the heat, get out of the kitchen.”

Thoughtful: “I understand this is stressful. Let’s focus on what we CAN control.”

When we can get our own emotions controlled by understanding and managing the things that we can affect, then we will be in a better position to help others. By communicating more effectively and reducing our reactive behavior, we will be in a better position to be more accommodating to those around us, on phone calls or in a video chat.

We can then remember to treat others the way they want to be treated. Don’t try to “fix” people. We can remember that they have different needs and fears and we can adapt ourselves to their pace or priority as best we can. It’s a time that we all need to listen more and pay attention to what other behavioral expressions we are broadcasting and being more accepting of the reactions of others.

So, in these troubling times, we do have the ability to make deposits to our own emotional bank account.  Even better, when we pay attention and care for others, we can also make emotional deposits to the accounts of those people who are important to us.

Stay safe, stay well.

Tim

Read the full article Communicating in Times of Crisis .

 

Send your questions about how to use your profile to identify and control what is likely to stress you sot that you can better react. Email

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Wednesday, May 20th, 2020

Here is an easy way to know that your team is ready to get back work.

We need to get back to work.  Here is an easy and free way to get everyone on your team on the same page with basic safety training.

Check it out:
https://www.firstresponse-ed.com/stay-safe/

 

First Response Training

Use code STAYSAFE2020 for FREE access to our Airborne Pathogens Course

 

Free Airborne Pathogens Workplace Safety eLearning Course.

As restrictions on businesses start to ease, we all want to get back to work and start generating revenue again. However, we must proceed with caution. COVID-19 is still with us, so it is vital to ensure that both employers and employees are equipped with the proper tools necessary to reduce the spread of the virus. The most important of these tools is a proper education on what the virus is and how it moves from person to person.

Here is a short video

Stay safe, stay well.

Tim

Please share this with a friend/colleague

Tuesday, May 12th, 2020

10% Happier Book Review

10 percent happier

Periodically, I share a favorite book review from Readitfor.me. There is never enough time to read all the latest books – this tool is a great way to learn and to stay on top of the latest topics and new ideas.

10% Happier by Dan Harris offers a timely intro on how to use meditation and mindfulness to come anxiety and reduce stress.

“The science supporting the health benefits of meditation continues to grow as does the number of Americans who count themselves as practitioners but, it took reading 10% HAPPIER to make me actually want to give it a try.” (Richard E. Besser, M.D., Chief Health and Medical Editor, ABC News)

Read on to see if mindfulness and meditation can help make you 10% happier.

10% Happier

By: Dan Harris

Readitfor.me Book Review

Dan Harris originally wanted to title this book The Voice In My Head Is an A-hole.

Throughout his career as a journalist and reporter, he – along with most of us – found that the voice in his head started as soon as he opened his eyes in the morning. And then, pretty much all day long, it heckles us with thoughts of the past and the future, much to the detriment of whatever we are doing in the present.

Though he didn’t find the path to enlightenment, he did find that a number of things he did – when done together – made him about 10% happier.

Where does 10% come from? Basically, what you are about to learn made Harris a much happier and more productive person. But he didn’t have a transformational experience that led him to a state of 100% bliss. So, finally, to explain why he now spends so much time focusing on mindfulness and practicing meditation, he says it’s because it makes him 10% happier. A totally unscientific number, but one that completely explains why he does what he does.

If you can quiet the voice in your head for the next 12 minutes, join me on a journey towards becoming 10% happier in everything you do.

The Voice in Your Head

One of the defining moments in Dan Harris’ career was when he had an on-screen meltdown. After years of nailing his on-screen time at ABC, he had a full-blown panic attack in front of millions of people.

It was the culmination of years of stress caused by the endless chatter in his mind. How many stories did he have on the air that week? What was the state of his relationship with is boss (the legendary Peter Jennings) right now? What else did he have coming up that might catapult him ahead of the other people vying for the plum jobs that were soon to open up?

That was his first step on the path to discovery. That in order to prevent that from happening again – which would surely be the end of his on-air career – he would have to find a way to quiet the voice is in his head.

He started to read books that he never would have even glanced at before, like Eckhart Tolle’s The Power of Now. He was intrigued enough about the ideas in the book that he tracked Tolle down for an interview.

The problem, Tolle said, is our ego. The ego is our inner narrator, and it is never satisfied. No matter how many creature comforts we accumulate, how many gourmet meals we consume, or how many rungs we climb on the career ladder, it always wants more.

One of the biggest problems our ego presents is that it is a comparison machine. It is always comparing itself to others. That explains why we are always measuring ourselves against the looks, wealth and social status of others.

Finally, and perhaps worst of all, it does all of that while thinking about the past and the future. As Tolle points out, we “live almost exclusively through memory and anticipation.”

Which is a real problem, because the only time that we ever have, in the literal sense, is now.

The biggest insight that Harris pulled from his time researching people like Tolle and scientists doing rigorous research on the human mind, was that your brain can be trained.

Happiness, therefore, is a skill.

Mindfullness

Once you get on the path to finding happiness, you almost always find your way back to the idea of mindfulness, and thus, the precepts and ideas of Buddhism.

According to Buddha, we have three natural responses to everything we experience in our lives – we want it, we reject it, or we zone out.

Butter tarts – a fine Canadian dessert hard to find south of the border? Want it. Flies in the house because somebody left the front door open? Reject it. The latest celebrity gossip? I zone out.

Everybody has their own ways of reacting to things, but they all find themselves neatly into one of those three buckets.

However, there’s a fourth option beyond judging an experience that is even more helpful – mindfulness. Here’s a formula that one of the mindfulness teachers taught Harris, neatly tied together by the acronym RAIN: Recognize, Allow, Investigate, Non-Identification.

To walk through this process and see how it works, let’s pretend that you’ve just had a stressful experience, like getting turned down for an important promotion at work.

R: Recognize

The first step would be to admit that you’ve just had a stressful experience, and you are in the midst of all of the emotions that come along with it.

A: Allow

The next step is to “lean in” to the experience. The goal with mindfulness isn’t to detach ourselves from the world, but to be fully present to it. Don’t resist the experience or emotions you are feeling. Let them happen.

I: Investigate

In this step we start to pay attention to how the experience is affecting us, in the moment. Start by examining your body. Is your face flush? Is your head throbbing? Is your breathing short and shallow? Almost every emotion comes along with clear physical signs – your job is to get familiar with them.

N: Non-Identification

In this last stage we consciously bring to mind the fact that just because right now we are angry and jealous at being passed over, it doesn’t mean that we are angry and jealous people.

Once you’ve gone through the RAIN cycle of truly being present to your experiences and feelings, you can finally let it go and move on to experience whatever comes next – like getting back to work so that the next time a promotion comes up, you get it.

As Harris continued his journey of discovery, he started to go deeper and deeper into what helped him become a happier and more productive person.

He boiled what he learned into 10 principles he calls The Way of The Worrier.

The Way of The Worrier

TWOTW #1: Don’t Be a Jerk

One of the great things about Harris’ job is that he gets access to interview people that most of us would only dream of breathing the same air as.

One of the people on that list is the Dalai Lama. And one of the biggest lessons he learned from him was that putting ourselves first was a natural human tendency.

As it turns out, the Dalai Lama taught Harris, practicing compassion towards others will actually make you a happier person. Scientists performing brain scans showed that acts of random kindness towards others registered more in the brain like eating chocolate than fulfilling an obligation.

So, don’t be a jerk. Not because it’s the right thing to do, but because it will make you happier.

TWOTW #2: (And/But . . .) When Necessary, Hide the Zen

The Sufi Muslims have a saying: “Praise Allah, but also tie your camel to the post.” In other words, while there are plenty of practical reasons to be nice to other people, don’t let the world walk all over you.

This is harder than it first might seem. Combining a true inner peace while still getting things done in a cutthroat environment takes practice.

TWOTW #3: Meditation

Meditation has been linked to a ridiculously long list of benefits, and is now being used to treat major depression, drug addiction, binge eating, stress among cancer patients, and ADHD.

The easiest way to get yourself on the mediation path are to follow the instructions that Harris was given when he first started.

First, sit comfortably, ensuring that your spine is relatively straight.

Second, notice what you feel when your breath goes in and out. Focus on one spot like your nostrils or chest. If you find yourself getting distracted easily, use a mantra like “in” and “out.”

Finally, whenever your attention wanders (as it inevitably will) forgive yourself and bring it back. What you are essentially practicing is (a) noticing when you are not being present, and (b) brining your attention back to the here and now so that you can be present.

Even doing this for a few minutes a day will make a noticeable improvement in your life.

TWOTW #4. The Price of Security Is Insecurity—Until It’s Not Useful

Some things are worth worrying about, and some things are not. Harris tells us that separating them from one another is one of your key tasks as you start your journey to become 10% happier.

This is where he departs from the wisdom of some of the gurus he learned from, and where you might find solace in the fact that you don’t need to spend your life in a state of bliss in order to benefit from mindfulness and mediation.

When you find yourself worrying about something, stop and ask yourself this simple question: “Is this useful?”

For instance, in business you are wise to be worrying about how to generate more customers or lower your costs when you need to generate more profit. Worrying about things that aren’t important and you can’t influence are things that you can leave to the chumps.

TWOTW #5. Equanimity Is Not the Enemy of Creativity

The quest towards happiness will not make you a blissed out zombie. There’s a myth that all creative people find their biggest inspiration in melancholy.

There’s no current research on this one way or the other, but an equally strong case can be made that once you are freed from useless worrying, you can channel your creativity more often and more effectively.

It’s a lot easier to come up with creative solutions to problems when your head isn’t filled with worry and dread.

TWOTW #6: Don’t Force It

Somewhere on your journey you’ll find yourself finding time for purposeful pauses, and realize that not everything can be solved through constant, unrelenting pressure.

Just like you can’t open a jar when all of the muscles in your body are tense, you can’t solve every problem in your life through sheer force.

TWOTW #7: Humility Prevents Humiliation

When the voice in your head isn’t busy worrying you to death, it’s busy telling you how great you are.

This causes you to make just as many bad decisions as worrying about things you can’t control. As a leader, this can very easily get in your way of producing the results you want to achieve.

So whenever you find yourself thinking those types of thoughts, follow the RAIN process and let them flow right through you.

TWOTW #8: Go Easy With The Internal Cattle Prod

The third main job of the ego (beside worrying and telling you how great you are) is to beat you up with self-criticism.

Many people are driven by their inner cattle prod, thinking that it’s the only way to achieve greatness in their business and life.

However, Harris points out that the people training in self-compassion mediation are more likely to do things like stick to a diet and quite smoking. Why? They are much better at bouncing back from missteps.

A much better approach is to learn from your failures than beat yourself up with them.

TWOTW #9: Non-attachment to Results

Have you ever found that life doesn’t always work out the way you think it should?

This is about coming to the realization that striving for results is fine, but that the final outcome is out of your control. Do everything you can to succeed, and then be fine with letting the chips fall where they may.

This ensures that when you fail (as you inevitably will), you’ll be able to dust yourself off and get ready for the next round.

TWOTW #10: What Matters Most

This entire list becomes a lot easier when you are crystal clear on what you want in your business and life. Instead of just following your ego – which always just wants “more” – get your head straight on what’s most important to you.

What do you really want?

Resources

Tools like meditation and mindfulness can help manage stress and anxiety.

The Team Strength DISC model is a great tool that helps you to easily identify and understand your own style, recognize and cognitively adapt to different styles. The Team Strength charting app makes it easy to develop a process to communicate more effectively with others both at work with team members and at home with family.

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Please share this with a friend/colleague

Tuesday, May 5th, 2020

PPP: Loan Forgiveness, Taxation, and Pitfalls

By: Patrick Ungashick

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP: Loan Forgiveness, Taxation, and Pitfalls

The Payroll Protection Program (PPP) forgivable loan program, after a rocky rollout, has entered a new reality-check phase. Some of the heralded program benefits seem to be fading away, and new risks for borrowers are emerging. Here’s what business owners and leaders need to know.

Loan Forgiveness and PPP Taxation

Last week, the IRS released Notice 2020-032 regarding the deductibility of expenses that are paid with PPP loan proceeds. The bottom line is that normally deductible expenses paid with PPP funds are likely not deductible. The reasoning is that if the loan is forgiven, and the borrowing business gets to deduct the expenses it paid with the PPP funds, that creates a “double benefit” for the borrowing company. 

Not everybody agrees with the IRS’s interpretation of this crucial component of the CARES Act. The AICPA is fighting it. Chris Hesse, CPA, chair of the AICPA Tax Executive Committee, said: “In effect, the IRS guidance means that the taxability provision [Section 1106(i)] has no meaning. Why waste the ink to say that for purposes of the Code, the loan forgiveness is not includible in income, if the government will just take away deductions in the same amount?”[1]

So, unless Congress intervenes and overrides the IRS, it seems that the much-proclaimed tax benefits of the PPP program have been largely taken off the table. 

Retroactive Guidance – Good Faith Certification of Need

As part of the PPP application, borrowers have been required to certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Neither the CARES Act nor the Treasury Department and Small Business Administration (SBA) offered any clarifying guidance on this provision. Rather, many congressional and governmental leaders initially urged business owners and executives to rush to apply, given the finite amount of loan proceeds available. 

Now, it appears the government has done an about-face. The Treasury Department’s latest guidelines retroactively instruct all PPP borrowers to make sure they can demonstrate a “need” for the funds, and also show that other sources of liquidity were not sufficiently available to that borrower. This standard did not exist when the PPP was first rolled out. 

Consequently, borrowers who received PPP loans must decide whether or not to keep the funds. Borrowers have until May 7th to repay the funds back to the SBA under a “Limited Safe Harbor” if they deem they cannot demonstrate that their need exists. 

Audit Risk

Finally, US Treasury Secretary Steven Mnuchin announced that any company which received $2 million or more in PPP funds will receive a full audit on the loan and how it was used. The announcement comes on the heels of several higher-profile companies that secured millions, and in some cases, tens of millions, in PPP funds. Secretary Mnuchin also reminded borrowers that they could face criminal liability if the Treasure Department determines that the borrower cannot demonstrate the economic need for the funds at the time of the application. 

And More Unanswered Questions

On top of these developments, many borrowers still have unanswered PPP questions such as eligible uses for the funds, how loan forgiveness is calculated, how to rehire furloughed employees, and others. PPP came into being in a cloud of confusion. While some questions have been answered, business owners and leaders now face a new round of uncertainty and frustration. 

Conclusion

At this point, PPP borrowers must consult with their lenders and tax and legal advisors to discuss their specific situation and questions—ideally prior to the expiration of the May 7th Limited Safe Harbor if there is any doubt about the wisdom of keeping the PPP funds. 

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

 

Contact Tim 772-221-4499, to discuss strategies for your business.

Friday, April 24th, 2020

PPP Funds Replenished – What You Need to Know

By: Patrick Ungashick

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP Funds Replenished – What You Need to Know

April 24, 2020 @ 12:00 PM

US federal lawmakers today passed legislation that replenishes the Payroll Protection Program (PPP) forgivable loan program, adding another $310 billion to the forgivable loan program created by the CARES Act in response to the coronavirus crisis. The first found of PPP funding, some $349 billion, was exhausted in 14 days as about 1.6 million US businesses rushed to secure a PPP loan.

Today’s legislation also restocks the SBA Economic Income Disaster Loan (EIDL) programs, adding $10 billion to the emergency grant program and $50 billion for disaster recovery loans. Both of those lending programs were fully exhausted, as US companies seek relief to help deal with the unprecedented challenges presented by the COVID-19 crisis.

If your company did not secure a PPP loan during the first round of funding, consider contacting your SBA-approved bank or other lending organization and completing an application as quickly as possible. Demand for the second round of funding is expected to be even greater than the first round.

If you did successfully complete a PPP loan and either have received your funds or are waiting for the funds to be released, be sure to study carefully the guidelines on the proper use of the funds and how to maximize loan forgiveness.

The following free resources can assist you with PPP and other relief programs available through the CARES Act:

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

 

Contact Tim 772-221-4499, to discuss strategies for your business.

 

Tuesday, April 21st, 2020

Communicating in Times of Crisis

Even when money is tight and the future is uncertain, remember to keep making deposits to your emotional bank account.

We are all living in highly stressful times; I hope this message finds you well.

Now that so many of us are working remotely, we are finding communication much more challenging. Even with video conferencing tools, it is still difficult to observe and process all of the nonverbal cues that we used to depend on for communication with coworkers, customers, and vendors.

Some of you that are working from home are fortunate to have your family with you. But by now you know that the additional job titles of teacher, cook, entertainer, etc., come with their stress-inducing challenges.

What to do?

First:

Breathe. Nice long relaxing breaths…

What we know about DISC in our own personality can help us, and those we care about, through the new abnormal.

When stress is present, people seek to reduce it, often by dumping it on the person “responsible” for the tension, which is unproductive. Each personality style has its own characteristic manner of “dumping” stress on another.

We all have stress-inducing situations that come and go in our lives. Lately, for most of us, the stress has been sticking around a lot longer.  In crisis situations stress is amplified. Behavioral expressions can change, and behaviors may intensify. We need to be ever more vigilant in our interactions with those we care about and those who are dependent on us in our work and at home. This is not easy. Even people with highly developed emotional intelligence (EIQ) are struggling.

Emotional intelligence refers to the capacity to be aware of, control and express our emotions as well as understanding the emotions of others. Empathy is an important characteristic of high EIQ but can be very difficult to display when we are stressed and outside of our comfort zone. Identifying and addressing the characteristic fears of our personality type will help to avoid some of the rough spots. Those rough spots can drain your emotional bank account and reduce your EIQ.

The chart below shows how a reduced EIQ can negatively impact personality traits:

DISC + EMOTIONAL INTELLIGENCE

DISC EIQ APRIL 2020 hi lo

 

If you found yourself migrating toward the right side of the chart recently, you are not alone. Without being conscious of the change:

  • A decisive and ambitious person can become more aggressive and confrontational when things are out of control.
  • A normally sociable and charming individual can become glib and distracted without enough opportunity for social interactions.
  • A patient, stable person can become stubborn or even un-responsive when there is no system or the normal pace of their life is disrupted.
  • A careful, neat person can become very critical and fussy when new rules or restrictions are unclear or not universally adhered to.

The good news is that you can adapt back to more positive traits. Identify the cause of the stress, based on your personality type, and address it.

Take some time to review your Team Strength DISC profile.  If you do not have a profile, then take a look at the graphic below with some broad descriptors of each of the DISC personality types. Find the broad descriptor that matches your personality best, keeping in mind that there may be two different areas that apply, and use that as your guide.

 

 

DISC Broad descriptors

 

Your Team Strength DISC profile will describe in detail your personality type and highlight some of the drivers that you react to, what you need and also some of the fears that can affect you. The chart below summarizes three key areas in each of the four profile styles.

DISC Summary

The following charts summarize the behaviors and needs of each style.

DISC EIQ APRIL 2020 d

 

DISC EIQ APRIL 2020 i

 

DISC EIQ APRIL 2020 s

 

DISC EIQ APRIL 2020 c

 

 

 

 

 

When we identify and control what is likely to stress us we can better react with thoughtfulness.  (That is a good time to take a nice, deep breath.) It is OK to understand and accept that we are under stress and not in a comfortable place.  That will start to refill our emotional bank account when we need it most. Here are comparisons for each style:

 

D Style

Emotional/Reactive: “If you can’t stand the heat, get out of the kitchen.”

Thoughtful: “I understand this is stressful. Let’s focus on what we CAN control.”

I Style

Emotional/Reactive: “Hey, let’s move on to something more positive!”

Thoughtful: “It’s difficult not seeing my friends. Can we find a time to get on a Zoom-social call?”

S Style

Emotional/Reactive: “Okay, if that’s the way you must have it, we’ll try it.”

Thoughtful: “I know things are uncertain right now. I just need to know that we are all in this together and we are going to get through it together.”

C Style

Emotional/Reactive: “I can’t help you any further. Do what you want.”

Thoughtful: “I know this is stressful. I just need to unplug for a day.”

 

When we can get our own emotions controlled by understanding and managing the things that we can affect, then we will be in a better position to help others. By communicating more effectively and reducing our reactive behavior, we will be in a better position to be more accommodating to those around us, on phone calls or in a video chat.

We can then remember to treat others the way they want to be treated. Don’t try to “fix” people. We can remember that they have different needs and fears and we can adapt ourselves to their pace or priority as best we can. It’s a time that we all need to listen more and pay attention to what other behavioral expressions we are broadcasting and being more accepting of the reactions of others.

So, in these troubling times, we do have the ability to make deposits to our own emotional bank account.  Even better, when we pay attention and care for others, we can also make emotional deposits to the accounts of those people who are important to us.

Stay safe, stay well.

Tim

 

Send your questions about how to use your profile to identify and control what is likely to stress you sot that you can better react. Email

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

 

Please share this with a friend/colleague

 

More Tools:

The first step to building stronger communication is awareness. By identifying how we are similar and different, we can make cognitive choices when interacting to create stronger, more engaged relationships.

Deeper Look at Team Strength DISC Styles 

 

Thursday, April 16th, 2020

PPP Confusion and Clarifications – Top 40 FAQs

By: Patrick Ungashick

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP Confusion and Clarifications – Top 40 FAQs

 

 

1.What is the Payroll Protection Program (PPP)?
The PPP is a brand-new loan program created by the CARES Act in response to the COVID-19 crisis.

(Note: Click here to download our 11-point CARES Act Executive Summary.)

2.How much money is available for loans under the PPP? (Or, when does the PPP program run out?)

The CARES Act funded the PPP with $349 billion. The window to apply for the PPP closes either when the $349 billion runs out (on a first-come-first-served basis) or on June 30, 2020—whichever happens first.

(Note: At the time of this writing, some Congressional leaders are advocating additional dollars toward the PPP, but that proposal has not been enacted into law.)

3.What interest rate applies to PPP loans?

The interest rate is 1.0%.

(Note: This figure changed several times as the PPP was being rolled out, but it has settled on 1.0%.)

4.What is the maturity date for PPP loans?

The maturity date is two years, beginning when a PPP loan is made.

(Note: This figure changed several times as the PPP was being rolled out, but it has settled on two years.)

5.Does the business owner need to guarantee the PPP loan personally?

No personal guarantee is required.

6.Does the business owner need to provide collateral for a PPP loan?

No. The Small Business Administration (SBA) has waived the traditional collateral requirement for PPP loans.

7.Does an applicant need to have tried and been unsuccessful in obtaining credit elsewhere?

No. The SBA has waived the traditional requirement that an applicant has been unsuccessful in obtaining credit elsewhere.

8.What businesses are eligible to obtain PPP loans?

Generally, businesses that employ no more than 500 employees. This includes sole proprietorships, self-employed individuals, and most non-profit organizations.

However, some businesses can be eligible even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue-based size standard corresponding to its primary industry. Go to www.sba.gov/size for the industry size standards.

Additionally, a business can qualify for the Paycheck Protection Program as a “small business concern” if it met both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.

If in doubt, contact your SBA-approved lender.

9.Can independent contractors apply for PPP loans?

Yes. While the PPP regulations clearly state that businesses cannot include independent contractors in their payroll calculations, it also states that independent contractors can apply separately for their own PPP loans starting on April 10, 2020.

10.How do you calculate the number of employees to determine the employee-based size limits?

Borrowers may use their average employment per pay period over the 12 months prior to the loan application date, or during calendar year 2019, to determine their number of employees.

(Note: Some lenders seem to be emphasizing using calendar year 2019 data.)

11.Can companies that have private equity or venture capital ownership/investments obtain loans under the PPP?

Potentially. The answer will depend on the type of investment and the degree of control held by the PE or VC organization. Contact your SBA-approved lender.

12.How do the $10 million cap and affiliation rules work for franchises?

If a franchise brand is listed on the SBA Franchise Directory, each of its franchisees that meets the applicable size standard can apply for a PPP loan. (The franchisor does not apply on behalf of its franchisees.) The $10 million cap on PPP loans is a limit per franchisee entity, and each franchisee is limited to one PPP loan. Franchise brands that have been denied listing on the Directory because of affiliation between franchisor and franchisee may request listing to receive PPP loans. SBA will not apply affiliation rules to a franchise brand requesting listing on the Directory to participate in the PPP, but SBA will confirm that the brand is otherwise eligible for listing on the Directory.

13.How do the $10 million cap and affiliation rules work for hotels and restaurants (and any business assigned a North American Industry Classification System (NAICS) code beginning with 72)?

Under the CARES Act, any single business entity that is assigned a NAICS code beginning with 72 (including hotels and restaurants) and that employs not more than 500 employees per physical location is eligible to receive a PPP loan.

In addition, SBA’s affiliation rules (13 CFR 121.103 and 13 CFR 121.301) do not apply to any business entity that is assigned a NAICS code beginning with 72 and that employs not more than a total of 500 employees. As a result, if each hotel or restaurant location owned by a parent business is a separate legal business entity, each hotel or restaurant location that employs not more than 500 employees is permitted to apply for a separate PPP loan provided it uses its unique EIN.

The $10 million maximum loan amount limitation applies to each eligible business entity because individual business entities cannot apply for more than one loan.

14.How much can an eligible borrower apply for under the PPP?

Applicants can generally borrow the lesser of $10 million, or 2.5 times the average monthly “payroll costs,” as explained below.

If there is an outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020, and April 3, 2020, that amount can be added to the PPP loan amount request, less the amount of any loan advance received.

15.What time period should borrowers use to determine their payroll costs to calculate their maximum loan amounts?

Most borrowers will use the calendar year 2019 aggregate payroll data.

(Note: There has been inconsistent information released by the Treasury Department and SBA on this question, with many sources stating that payroll data for the immediate 12-months prior to submitting the loan application may be used instead of calendar year 2019 data. However, the SBA and lenders seem to be emphasizing using calendar year 2019 data.)

16.What if the business has seasonal workers, or is a newly established business?

For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the period January 1, 2020 through February 29, 2020.

17.What are “Payroll Costs?”

“Payroll costs” generally mean the following compensation elements for employees (not any independent contractors) whose principal place of residence is in the US:

  • Salary, wage, commission, or similar compensation for any employee whose principal place of residence is in the U.S. (capped at $100,000 on an annualized basis for each employee)
  • Cash tips or equivalents
  • Payment for vacation, parental, family, medical, or sick leave
  • Allowance for dismissal or separation
  • Payment required for the provision of group healthcare benefits, including insurance premiums
  • Payment of any retirement benefit
  • Payment of state and local taxes assessed in connection with the foregoing

18.Are part-time or seasonal employees included in the payroll costs?
Yes. All employees paid during the period of time are included in payroll costs.

19.Are benefits such as healthcare, 401k, and payment of state and local taxes included in the $100,000 per employee cap?

No. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, including:

  • Employer contributions to defined-benefit or defined-contribution retirement plans
  • Payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums
  • Payment of state and local taxes assessed on the compensation of employees

 

20.Are federal taxes included in the payroll costs used to calculate the maximum loan amount?
No. Payroll costs are calculated on a gross basis without regard to federal taxes imposed or withheld, including FICA and Medicare. Payroll costs are not reduced by taxes imposed on an employee and are not increased by the employer’s share of payroll taxes.

21.Do PPP loans cover paid sick leave?

Yes. “Payroll costs” includes costs for employee vacation, parental, family, medical, and sick leave. However, the CARES Act excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).

22.If the borrower is an S-corporation, are S-corporation distributions included in the payroll costs?

Likely no.

“Specific guidance is not available related to shareholder distributions, but since these distributions are not considered wages to the shareholder, it is presumed that shareholder distributions are not to be included in payroll costs.”
Source: AICPA’s PPP Resources

23.If the borrower is a partnership or LLC, how should partner/member compensation be treated?
For partners in a partnership, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership.

24.What if the business uses a Professional Employer Organization (PEO) and therefore, may not be able to document its own payroll information?

There should be proper documents that the borrower can obtain from its payroll provider for the PPP loan application process.

25.What are permissible uses for PPP funds?

Borrowers may use PPP loan funds to pay payroll costs (as previously defined), health care benefits, mortgage interest payments, rent, utility, interest payments on debt incurred prior to February 15, 2020, and/or refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.

26.How much of the PPP loan amount may be forgiven?

The entire PPP loan potentially may be forgiven, plus any accrued interest.

27.Is the loan forgiveness taxable?

No. Forgiveness of any portion of the PPP loan does not constitute taxable income for the borrower.

28.How is the amount of loan forgiveness calculated?

The debt eligible for forgiveness is equal to the eligible expenses paid by the borrowing company during an eight week-period beginning on the date the lender makes the first disbursement of the PPP funds to the borrower. The eligible expenses include:

  • Payroll costs (as defined earlier)
  • Interest on mortgage obligations incurred before February 15, 2020*
  • Rent under a lease existing before February 15, 2020*
  • Utilities for which service began prior to February 15, 2020*
  • Refinancing an SBA EIDL loan made between January 31, 2020, and April 3, 2020 (less any advance on the EIDL loan up to $10,000)*

*No more than 25% of the forgiven amount may be attributable to non-payroll costs.

Click here to download our guide on How to Maximize the PPP Funds and loan forgiveness.

29.How is loan forgiveness reduced if the borrower lowers salaries or wages, or loses employees, during the eight-week period?

The amount of loan forgiveness is generally reduced by two factors:

  • Any reduction in the ratio of (1) the average number of monthly full-time equivalent (FTE) employees during the eight-week period versus (2) those employed during one of two reference periods selected by the borrower: either February 15 to June 30, 2019 OR January 1 to February 29, 2020
  • The amount of any reduction in total salary or wages of any employee during an eight-week period in excess of 25% of the total wages and salary of the employee during the most recent full quarter during which the employee was employed—taking into account only employees whose annualized salary was less than $100,000.

(Note: The SBA may provide further guidance to address any changes in non-wage benefits during the eight-week period or any changes outside of the eight-week period.)

30.Can any loan forgiveness be restored if the borrower has already cut employee salaries and/or wages, and/or reduced headcounts?

Yes.

The reduction in loan forgiveness for a reduction in salaries or wages can be avoided if the borrower restores by June 30, 2020 the same wages the employee(s) was earning as of February 15, 2020 as compared to wages paid between February 15, 2020 and April 26, 2020.

The reduction in loan forgiveness for a reduction in headcount can be avoided if the reduction in FTEs that occurred during the period between February 15, 2020 and April 26, 2020 is restored by June 30, 2020.

(Note: We expect further guidance on this issue from the SBA.)

31.What if an employee voluntarily terminates or is terminated for poor job performance? Is the loan forgiveness still reduced in those situations?

Likely yes. At this time, the CARES Act and the PPP guidance issued by the Treasury Department and SBA do not make any distinctions for why an employee may have terminated employment, so that loan forgiveness is only tied to employee count comparisons and whether or not specific employees had their pay substantially reduced. Specific guidance on this question may be forthcoming.

32.When do borrowers need to start repaying a PPP loan?

For any amount of PPP loan that is not forgiven, borrowers may defer making principal or interest payments for six months. But interest does accrue during this deferral period.

33.Are there any prepayment penalties for PPP loans?

No, there are no prepayment penalties on PPP loans.

34.Are there any fees for PPP loans?

No, PPP loans do not require any fees to be paid by the borrower.

35.How many PPP loans can a company obtain?

The program is limited to one loan per borrower, as identified by its Tax Identification Number (TIN) such as the Employer Identification Number (EIN) or the Social Security Number (SSN).

36.How do you get a PPP loan?

Contact a bank or other lending institution that is approved to work with the SBA. Due to the very high demand for PPP loans, it is best to start with your existing banking relationship.

37.When can eligible applicants apply?

Applicants can apply from April 3, 2020, to June 30, 2020.

38.What do applicants need to submit?

Generally, applicants must initially submit a completed SBA Form 2483 (Paycheck Protection Program Application Form) and payroll and other documentation to a PPP lender. The lender may require additional documentation as it deems necessary.

39.Should a business apply for PPP loans through multiple banks?

While there is no restriction against filing multiple PPP applications through different lenders, at the time of this writing, many lenders are only taking applications from existing customers due to high volume. Plus, it is possible that multiple applications from the same applicant could cause confusion, slowing the application, or even triggering potential fraud alerts. Therefore, it seems advisable to work with only one lender, if possible.

40.How long will it take until the borrower gets its funds once a PPP loan has been submitted?

The PPP regulations stipulate that lenders should issue PPP funds within 10 calendar days from the date of loan approval. However, given the massive volume of PPP loans, it is difficult to generalize on loan review and approval times. Contact your SBA-approved lender to inquire about your PPP application status.

Once you have filed your PPP loan application, read this article for 11-steps to maximize the loan forgiveness and impact on your company.

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.