I have been a part of the sporting goods community for over 3 decades and I have never been prouder to be a part of this amazing community than I am today. Our industry is truly giving everything we have in order to take care of our employees, customers, and communities in these difficult times. There is no doubt the sporting goods industry will come roaring back once this war is won.
One of the main topics of discussions with my dealer friends has been about the recently passed CARES Act and if it will really be helpful in their efforts to take care of their employees. Therefore, I thought it would be helpful to share some info that has recently been released. In order to keep this post as short as possible I am only going to cover the highlights, but I will include links to helpful information.
The most important thing you need to do right now is to leverage your existing banking relationship. The SBA is allowing banks to issue the relief stimulus directly so utilize your banker to help you navigate through the bureaucracy. Keep in mind they may not have all the details right now; however, they will shortly, and they will be able to help guide you through this process. Other good resources for information and guidance would be your accountant and your payroll service provider.
The CARES Act allocated 350 Billion in Federally Guaranteed loans to help small businesses keep people employed. Loans can be up to 2.5X the borrowers monthly payroll costs incurred during the year prior to the loan date, but not to exceed 10 million dollars.
Importantly, these loans may be forgiven if borrower maintains their payroll during the crisis or restores them afterwards. The borrower must certify (good faith) that the loans will be used to maintain payroll or make mortgage, lease, and utility payments. The amount of loan forgiveness will be reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees. However; reduction in employment or wages that occur during the period beginning on Feb 15th 2020 and ending 30 days after enactment of the CARES Act, (as compared to Feb 15th 2020) shall NOT reduce the amount of loan forgiveness IF by June 30, 2020 the borrower eliminates the reduction in employees or reduction in wages.
There are formula’s you need to be aware of and you can find those along with additional information on the Chamber Of Commerce website- https://www.uschamber.com/sbloans.
You can also find helpful info on the SBA website along with a link to apply for a for an SBA Economic Injury Disaster Loan – https://disasterloan.sba.gov/ela. I will forewarn you that when I went to this website, I found it to be extremely slow (probably because of traffic to the site) and somewhat clunky. I would strongly recommend going through your bank to complete any Economic Injury Disaster Loan Applications. Another source that I found to be very helpful was the Fit Small Business Website – https://fitsmallbusiness.com/cares-covid-19-stimulus-package/
If you have any problems with the links provided or the sites go down because of traffic, feel free to contact me through our website www.sports-and-recreation.com or via email firstname.lastname@example.org and I will be happy to forward you PDF’s. We will do our best to communicate info as we get it through our website and social media pages.