Since the COVID-19 emergency began, Kallas Restaurant Accounting has been tracking all the relief programs and new law changes for our restaurant clients. There is an overload of information from many different sources and much of it duplicated and some inconsistent. The details of how the various programs work together or are implemented is still being issued over the next few weeks.
But, here are the first steps Kallas Company recommends to help get through the shutdown.
1. Cut your payroll down to minimum or close your doors until at least April 30.
2. If you are on the payroll of your own corporation, consider collecting unemployment benefits.
3. Contact your mortgage holders (business and personal) and request 180 day deferral of payments.
4. If you receive Minimum Required Distributions from your retirement account, call your broker to skip this year.
5. If your 2018 income was below the thresholds for INDIVIDUALS (article page 3), you can expect a check or direct deposit from the government.
6. Apply for the independent loans and grant described (article page 2). If you obtain a grant, that is free money. If you obtain a loan you can use it for urgent needs or just pay it back.
7. START NOW with an application for the direct SBA EIDL loan. This loan offers an immediate $10,000 advance and any remaining loan can be rolled over into the forgivable PPP loan later. This will help you pay bills including payroll during shut down or partial shutdown and some or all of it may be forgiven. We are recommending to borrow the maximum amount now. If it turns out you do not need the money just pay it back. Repayment can be deferred up to 12 months.
8. If you do not want to prepare the application yourself, call the bank you do business with or our recommended SBA loan experts at Independence Business Consulting (IBA) at 248—924-2410.
9. Once the application is completed, request a $10,000 advance on the loan. SBA is supposed to cut you a check within 3 days.
10. As business picks up, start calling back employees to work.
11. As you re-start business and add payroll again, the new CARES Act has a provision to help your cash flow immediately. There is a provision to allow you to delay paying a certain portion of your payroll taxes for over one year. We are waiting for those rules to be issued and will let you know as soon as they are.