News Roundup for Small Business Owners: April 7, 2020

Here’s the latest news about relief efforts for small businesses, particularly via the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans:

• No shock to anyone, but the SBA’s “E-Tran” system has been “up and down,” including a crash for several hours yesterday afternoon. This is the portal banks use to submit reviewed PPP applications to the SBA for authorization. (Politico)
• Treasury Secretary Mnuchin is requesting a $250 billion reinforcement to the PPP, with a vote to come as soon as Thursday. It will be interesting to watch how this plays out on the Hill. Since the Senate is out of session, this supplemental legislation would require unanimous consent of the lawmakers who are present. While Mnuchin claims there is bipartisan support for the increased aid, the Democrats in the House are questioning who is getting the funding:

• If you’re a landlord, don’t expect help from the PPP. The SBA considers rental income to be a “passive business” and thus ineligible for the program (and for any SBA-backed program) unless over half the company’s income comes from items other than rent. This leaves property owners who have large mortgage payments in a lurch. We’ll be interested to see how that plays out in combination with commercial and residential rent deferments. (The Real Deal)
• Another group getting shut out thus far is partnerships. The Treasury Department posted guidance for lenders late last night, and it didn’t clear things up much for businesses with multiple owners, including small businesses with venture capital or private equity funding. PE-control greater than 50% or VC investment makes the company an “affiliate” of other businesses within that VC-group/PE investor’s portfolio and thus may trigger the maximum total employees of over 500 thereby becoming ineligible. There’s a new alternative-size option for being defined as a small business by owning less than $15 million in tangible assets while maintaining an average net profit of less than $5 million over the last two years. We suggest reading this report from the National Venture Capital Association (NVCA) published just this afternoon for guidance. (NVCA)
• We came across this story from our local NPR affiliate that had an anecdote about one of our favorite Oregon breweries, Double Mountain. (If you haven’t tried it, find a way #savesmallbusiness). In the story, owner Matt Swihart was told his company would have to wait to apply for a PPP loan because the brewery was started by a small group of family and friends, despite the fact he is the primary owner (the article did not disclose his ownership share). Evidently his bank, US Bank, said they would have to wait a week for a “different application.” Anyone else experience this? Is this a US Bank thing or an SBA thing? (OPB)
• Anyone get an EIDL advance yet? According to an article on Slate, the Main Street Alliance is saying they don’t know of any members yet to receive any money. This article also mentions the note I made yesterday about the Massachusetts SBA office saying the advance was $1,000 per employee up to $10,000, but received no reply from the SBA about it’s accuracy. I’ll continue to monitor this. (Slate)
• Please add questions below that we can try to help you answer, or comments for discussion. We’re all plugging through this together!

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Masterplans is a veteran-owned business that specializes in providing the highest-level business development consulting located in Portland, Oregon. For 17 years we have helped thousands of entrepreneurs launch new businesses and put their ideas in motion. Now, more than ever, we want to see these same businesses survive the largest economic disaster of our generation.