#Agency 11: Paycheck Protection Program: What it Means for Your Business w/ Drew McLellan

WEBVTT 1 00:00:04.599 --> 00:00:10.109 Hey everybody, drew McClellan here from Agency Management Institute. Grateful to be here 2 00:00:10.390 --> 00:00:14.830 on the agency track with our friends from Bob Growth. Many thanks to them 3 00:00:15.390 --> 00:00:19.750 for inviting me to host this track with you today. What I want to 4 00:00:19.789 --> 00:00:27.859 talk to you about is the very recent care act passing in relation to Covid 5 00:00:27.899 --> 00:00:32.140 nineteen. So sure all of you are paying attention to the fact that the 6 00:00:32.299 --> 00:00:38.369 federal government is scrambling to try and get aid and relief out to individuals two 7 00:00:38.409 --> 00:00:45.530 small businesses across the country. And they just last week, and recording this 8 00:00:45.770 --> 00:00:52.520 on Monday march thirty, just last week they approved and the presidents signed the 9 00:00:52.759 --> 00:00:59.759 Care Act, which is a two trillion with a tea trillion dollar relief bill 10 00:01:00.200 --> 00:01:03.439 that's got all kinds of different provisions in it, but the one that I 11 00:01:03.520 --> 00:01:08.430 want to call your attention to is the paycheck protection program and the purpose of 12 00:01:08.629 --> 00:01:15.269 that, of that program is to help small businesses like your agency and mine 13 00:01:15.790 --> 00:01:22.500 not have to let our employees go because of business disruption. So the way 14 00:01:22.500 --> 00:01:27.939 it works is you will provide some documentation, probably year and PNL's, but 15 00:01:29.099 --> 00:01:37.890 most important your payroll numbers for the last year and also your utility and rent 16 00:01:38.010 --> 00:01:41.969 and mortgage numbers for the last year. So you're going to present some documentation 17 00:01:42.129 --> 00:01:46.769 that shows here's how much I've been paying in payroll and benefits and here's what 18 00:01:46.849 --> 00:01:49.719 I pay in utilities, rent, mortgage, that sort of thing. And 19 00:01:49.879 --> 00:01:53.959 then your bank or your credit union. So this this loan is being administered 20 00:01:55.640 --> 00:02:00.359 through seven, a lender, so that's pretty much any bank that is FDIC 21 00:02:00.560 --> 00:02:04.790 insured or any Credit Union that is federally insured is going to be able to 22 00:02:04.870 --> 00:02:08.789 administer administer these loans. And the cool thing about these loans is there forgivable. 23 00:02:09.349 --> 00:02:12.990 So let me tell you how it works. So you go to your 24 00:02:12.990 --> 00:02:15.180 bank or Credit Union, you tell them you want to apply for the PPP 25 00:02:15.419 --> 00:02:23.460 loan, the paycheck protection program loan. You provide your documentation and you will 26 00:02:23.460 --> 00:02:30.449 be given a loan that is basically two point five times your monthly nut. 27 00:02:30.689 --> 00:02:36.930 So you're loaded salaries and your utilities and rent and mortgage. So they're going 28 00:02:36.930 --> 00:02:39.129 to take whatever that number is, they're going to multiply it by two point 29 00:02:39.250 --> 00:02:44.599 five and they're going to deposit that amount of money into your checking account, 30 00:02:44.599 --> 00:02:47.719 assuming you already have a relationship with this bank, and that is your loan. 31 00:02:47.759 --> 00:02:53.759 Amount and the loan is there's no collateral, it's not tied to you 32 00:02:53.960 --> 00:02:57.439 personally. It's I believe the interest rate is going to be. I think 33 00:02:57.479 --> 00:03:00.990 it has to be four percent or less. I'm not sure if that's been 34 00:03:00.469 --> 00:03:05.789 determined yet, but it should happen this week and as long as you do 35 00:03:06.030 --> 00:03:12.750 not change your staffing in the two months that the loan covers, then the 36 00:03:12.860 --> 00:03:15.500 loan is forgiven and all you have to do is pay the interest on that 37 00:03:15.699 --> 00:03:19.819 loan. And I don't think the loan actually comes due, so you won't 38 00:03:19.860 --> 00:03:22.219 have to pay the interest I think. I think it's a year, but 39 00:03:22.460 --> 00:03:27.139 honestly this is so brand new that a lot of the details are a little 40 00:03:27.139 --> 00:03:30.569 fussy. But here's what you need to do. I know to trillion sounds 41 00:03:30.610 --> 00:03:35.009 like a lot of money, but remember that's being scattered by out into many 42 00:03:35.129 --> 00:03:38.169 programs that are inside this care act, including the one that sends like two 43 00:03:38.289 --> 00:03:44.159 hundred dollars to every American who filed taxes. So we're talking that money is 44 00:03:44.159 --> 00:03:46.759 going to go quickly, and so you don't want to dilly or dally on 45 00:03:46.879 --> 00:03:50.000 this. So what you want to do is you want to talk to your 46 00:03:50.039 --> 00:03:53.639 CPA. You want to gather the documentation that you're going to need and you 47 00:03:53.759 --> 00:03:58.310 need to call your banker and you need to say look, I'm I know 48 00:03:58.550 --> 00:04:02.349 that odds are you're still getting your ducks in a row around this program but 49 00:04:02.469 --> 00:04:06.150 as soon as you're ready to take applications, I want to be first in 50 00:04:06.270 --> 00:04:11.460 line. So here's the documents I'm gathering. Is that all I need? 51 00:04:11.659 --> 00:04:15.019 Do you need anything else? And let them tell you that and then you 52 00:04:15.259 --> 00:04:19.579 get all the documents together and you apply as quickly as possible so that money 53 00:04:19.620 --> 00:04:25.170 doesn't run out before you get your share of that money. So again, 54 00:04:25.370 --> 00:04:30.250 it is a forgivable loan as long as you don't make changes in your staffing. 55 00:04:30.649 --> 00:04:33.410 And I believe, and don't quote me on this, but I believe 56 00:04:33.449 --> 00:04:39.959 it also allows you to include your ninety nine and I'm not sure how they're 57 00:04:39.959 --> 00:04:42.920 going to determine that. So you're going to want to talk to your bank 58 00:04:42.959 --> 00:04:46.160 or about that. The actual document, which is about eight hundred pages, 59 00:04:46.759 --> 00:04:50.680 was not very specific about it. Just mentions that your independent contractors may be 60 00:04:50.839 --> 00:04:54.949 covered as well, but there's no detail they're. So you're going to want 61 00:04:54.990 --> 00:04:59.750 to ask about that. There's all kinds of documentation on the care act and 62 00:04:59.790 --> 00:05:05.389 all kinds of other things were related to surviving and thriving through covid nineteen and 63 00:05:05.829 --> 00:05:10.740 getting to the other side, and you can find all of those at agency 64 00:05:10.819 --> 00:05:16.660 Management Institutecom covid. What we've done is we've organized these resources and, by 65 00:05:16.660 --> 00:05:19.540 the way, we're not it's not firewall, we're not going to ask for 66 00:05:19.579 --> 00:05:24.449 your email address for not going to try and sell you anything. I just 67 00:05:24.769 --> 00:05:29.009 want you to have the resources you need to be able to manage through this 68 00:05:29.209 --> 00:05:32.050 crisis for you and your team and your clients. So, anyway, the 69 00:05:33.009 --> 00:05:40.600 stuff I mean, it's everything from podcasts and webinars and videos and then documentations 70 00:05:40.720 --> 00:05:46.079 from the federal government and breakdowns of the Care Act and actual English so you 71 00:05:46.120 --> 00:05:49.029 can understand it. All of that stuff is organized by dates. The most 72 00:05:49.189 --> 00:05:54.110 current documents are at the top of the page and then you can scroll down 73 00:05:54.189 --> 00:05:57.670 and see all of the things that we've been putting together for the last several 74 00:05:57.709 --> 00:06:00.589 weeks. So I hope to take full advantage of that. Use whatever there 75 00:06:00.870 --> 00:06:04.220 is a value to you and disregard the rest. But we just want to 76 00:06:04.259 --> 00:06:09.500 be a resource to agencies right now as you navigate all of this, but 77 00:06:10.060 --> 00:06:15.300 your number one job this week is to call your banker and get on their 78 00:06:15.300 --> 00:06:19.529 radar screen that they know you want to file for this loan and that you 79 00:06:19.730 --> 00:06:25.170 have everything ready and you're ready to go. Do not, do not let 80 00:06:25.290 --> 00:06:29.329 this opportunity go by. So I got an email from an agency owner that 81 00:06:29.449 --> 00:06:31.850 said, well, I have no debt right now, so should I not 82 00:06:31.959 --> 00:06:36.240 apply or would I be ineligible? And know you would not be ineligible. 83 00:06:36.680 --> 00:06:42.199 And the reality is that is it is a very rare agency that has not 84 00:06:42.319 --> 00:06:44.399 had some impact. That is one thing you have to do. You have 85 00:06:44.480 --> 00:06:48.910 to you have to talk about and again there's no language in the act that 86 00:06:49.069 --> 00:06:53.350 says how, but you have to show, and I'm assuming that's just with 87 00:06:53.509 --> 00:06:59.709 giving them examples of how your business has been adversely affected by the COVID virus. 88 00:06:59.870 --> 00:07:03.180 And everybody has had that. So, whether it's expenses from having to 89 00:07:03.259 --> 00:07:08.860 work from home or lost revenue or whatever it may be, can't imagine there's 90 00:07:08.860 --> 00:07:15.620 an agency listening to this that has not been impacted by the COVID nineteen situation. 91 00:07:15.930 --> 00:07:19.569 So you have to be able to prove or document or tell stories or 92 00:07:19.970 --> 00:07:24.569 however they're going to do that. That you have been impacted, that you've 93 00:07:24.610 --> 00:07:28.730 had clients walk or whatever, whatever your story is, you've got to have 94 00:07:28.810 --> 00:07:32.360 your payroll documented, your benefits documented in terms of what you've spent and then, 95 00:07:32.399 --> 00:07:35.439 like I said, utilities, rent and mortgage. So the quicker you 96 00:07:35.519 --> 00:07:39.759 can get that gathered and the quicker you can get a hold of your banker, 97 00:07:40.160 --> 00:07:43.800 the further up in line you will be so that you can take advantage 98 00:07:43.800 --> 00:07:46.189 of it. So for many of you, you know, knock on wood, 99 00:07:46.230 --> 00:07:50.350 maybe you're not experiencing a lot of loss and maybe you don't feel like 100 00:07:50.389 --> 00:07:54.670 you need a safety matter. You've got a pretty good sized line of credit 101 00:07:54.949 --> 00:07:59.139 that you think you could just use that. So I'm not saying every agency 102 00:07:59.180 --> 00:08:01.939 out there needs to go after this, but what I'm saying is the vast 103 00:08:01.019 --> 00:08:05.420 majority of you, this would give you a couple months of relief that would 104 00:08:05.459 --> 00:08:11.220 allow you to weather the storm without having to go into retained earnings or your 105 00:08:11.300 --> 00:08:15.769 line of credit. And remember what I said in the last episode. Your 106 00:08:15.810 --> 00:08:20.889 goal is no debt. You will do not go into the red during this 107 00:08:20.050 --> 00:08:28.199 season because you have to be ready and strong and salvageable when you get through 108 00:08:28.360 --> 00:08:33.320 this storm and and being deep in debt and taking on water. To stick 109 00:08:33.399 --> 00:08:35.000 with my you're the captain of the ship that needs to get it to calm 110 00:08:35.080 --> 00:08:39.559 waters, metaphor. If you're taking on water, then you can't survive this 111 00:08:39.799 --> 00:08:43.669 and you're not going to be able to be strong and ready to go when 112 00:08:43.710 --> 00:08:48.350 the storm passes, because the storm will pass. We did a podcast that 113 00:08:48.429 --> 00:08:52.470 you can find the link to on the website that I just told you, 114 00:08:52.190 --> 00:08:56.500 with an agency owner out of Hong Kong. There are three months ahead of 115 00:08:56.539 --> 00:09:01.379 us and it's a very different story for them now. They're back at work, 116 00:09:01.740 --> 00:09:07.019 they're back having facetoface meetings, the restaurants are open and they're back serving 117 00:09:07.139 --> 00:09:11.009 clients again and a much more aggressive way than they were a couple months ago, 118 00:09:11.330 --> 00:09:13.730 which is where we're at right now. So there is a light at 119 00:09:13.730 --> 00:09:16.409 the end of the tunnel. It is not a train, but we have 120 00:09:16.490 --> 00:09:22.929 to get there and I think they paycheck protection program will help many of you 121 00:09:22.250 --> 00:09:28.039 get there stronger and ready to serve your clients. All right, and and 122 00:09:28.720 --> 00:09:31.799 it. I know one of the things that a lot of you are really 123 00:09:31.879 --> 00:09:35.840 stressing out about is having to let good people go in the midst of a 124 00:09:35.919 --> 00:09:41.429 crisis, especially let them go and maybe they don't have health insurance anymore. 125 00:09:41.429 --> 00:09:45.750 So this is a way for you to protect your people, protect jobs and 126 00:09:46.549 --> 00:09:50.110 come out stronger and better on the other side. So check it out. 127 00:09:50.710 --> 00:09:54.539 There's all kinds of documentation out on the Internet. Obviously we've called through it 128 00:09:54.659 --> 00:09:58.620 and and have linked to some of the pieces that we think make it easiest 129 00:09:58.659 --> 00:10:07.529 to understand on the agency management Institutecom covid page, but you certainly can find 130 00:10:07.570 --> 00:10:13.450 it resources of other places. But don't don't wait in this if you are 131 00:10:13.529 --> 00:10:16.690 going to take advantage of it, jump on it right now, all right, 132 00:10:16.129 --> 00:10:20.330 and if you're looking for help, if you need anything, please come 133 00:10:20.409 --> 00:10:24.320 find us. We are ready to help agencies whether this storm, and we're 134 00:10:24.360 --> 00:10:28.000 trying to put out as much helpful content as we can and we would love 135 00:10:28.039 --> 00:10:31.320 to welcome you into the fold and be helpful to you. And again, 136 00:10:33.080 --> 00:10:35.559 no, we're not going to sell you anything, we're not. All we 137 00:10:35.639 --> 00:10:37.350 want to do as help. So if we can be helpful to you, 138 00:10:37.789 --> 00:10:41.990 please come find us and let us do that. All right, I'll be 139 00:10:41.110 --> 00:10:46.230 back with another episode soon. Again, many thanks to the folks that be 140 00:10:46.350 --> 00:10:50.980 to be growth. We also are producing a lot of content around this topic 141 00:10:50.100 --> 00:10:54.259 on my podcast build a better agency. So if you're not a listener already, 142 00:10:54.899 --> 00:10:58.139 now might be a good time to tune into an episode or two. 143 00:10:58.500 --> 00:11:03.580 We'd love to have you and I'll be back soon with another episode. Thanks. 144 00:11:05.649 --> 00:11:09.850 I hate it when podcasts incessantly ask their listeners for reviews, but I 145 00:11:09.929 --> 00:11:13.610 get why they do it, because reviews are enormously helpful when you're trying to 146 00:11:13.610 --> 00:11:16.929 grow a podcast audience. So here's what we decided to do. If you 147 00:11:18.049 --> 00:11:20.440 leave a review for be to be growth and apple podcasts and email me a 148 00:11:20.559 --> 00:11:24.759 screenshot of the review to James at Sweet Fish Mediacom, I'll send you a 149 00:11:24.919 --> 00:11:28.919 signed copy of my new book, content based networking, how to instantly connect 150 00:11:28.919 --> 00:11:31.909 with anyone you want to know. We get a review, you get a 151 00:11:31.950 --> 00:11:33.309 free book. We both win.