When Palisadian Nina Madok spoke to several local business owners who are struggling during the coronavirus shutdown, and then read about Toppings Yogurt and its dire financial situation on Via de la Paz, she asked herself, “What can I do to give back to the community?”
She soon came up with an answer: Creating a website that contains all the information that a small business would need to apply for financial relief from the federal government’s $2.2 trillion Coronavirus Aid Package.
A lawyer with two young children, Madok’s was director of business development at the law firm Paul Hastings when she retired.
She began working on her PaliBiz website (“The Small Business Resource for Pacific Palisades”) last Saturday and competed it on Wednesday.
Lenders can start processing applications from small business owners (less than 500 employees) and sole proprietors on Friday, April 3. (Independent contractors and self-employed individuals can apply starting April 10.)
Madok said the application deadline is June 30, but urges business owners to apply soon, because the program is capped at $349 billion and money could run out. (Hard to believe that $349 billion will run out soon, but that’s the grim reality.)
According to an April 1 story in New York magazine (“The Small-Business Bailout Just Got a Lot Better”), “The government will provide you with a loan equivalent to eight weeks of your prior average payroll (or, for the self-employed, earnings), plus an additional 25 percent of that sum (unless that grand total adds up to more than $10 million, which is the cap for any individual firm). You do not need to make any payments on that loan for six months. And if you maintain your workforce, then the government will entirely forgive the portion of the loan spent on payroll, benefits, utilities, rent, mortgage payments, or other debts. In other words, it will forgive more or less all of it.”
Madok provides contact people at two local banks (Wells Fargo and Bank of California), but according to the program, a business owner can apply to any federally insured depository institution or federally insured credit union and secure enough money to cover payroll for two months.
“I thought it would be so easy for our local businesses if we could just put out all the information for them,” Madok said. “Think how much time they can now save.”
The Pacific Palisades Chamber of Commerce has offered to provide Madok’s website link to all of its members.
Madok and her husband Bob, also a lawyer, moved to the Alphabet Streets neighborhood in 2000. Their children, 11-year-old Gabriella and 4-year-old Andrew, are students at Calvary Christian School.
The Small Business Resource
for Pacific Palisades
The purpose of this document is to provide a landing place for our local small businesses to help them better navigate the challenges they face dealing with the Covid-19 virus. Here you will find resources that can and should be used for all the issues you are dealing with, such as communicating with your landlord, your insurance carrier and your bank.
We are offering links to useful documents and contact information for professionals who are ready and willing to step up and help. As you navigate this document, please pay attention to the things that you like, things you don’t, and tell us what you need that’s not here. We will go out, find it and add it.
We love the small businesses in Pacific Palisades — they are the heart of our community and we want to help them survive and thrive.
Tendering a Claim to Your Insurance Company
All businesses should have some type of business interruption insurance as part of their property insurance policy. If your business has been adversely affected during this time, you should file a claim with your insurance company.
While many policies may seem to contain language that would limit or exclude a claim under current circumstances, that still may not bar your claim. There is discussion currently underway by governments indicating they may take action to compel insurance companies to provide some sort of coverage. If you haven’t applied, you may not be eligible.
Additionally, please note that even though “damage” suffered by your business may not appear to be physical, such as in the case of a fire, your business may still have suffered loss or damage, entitling you to relief, including:
— net income you would have earned if the incident had not occurred;
— normal operating expenses that continue even while your business is closed, such as utilities or payroll;
— expenses for cleaning your premises, including hiring a professional cleaning service;
— money spent to bring customers back to your business such as public relations and advertising;
— expenses incurred in pursuing your claim including hiring professionals such as lawyers and accountants;
— expenses necessitated by the use of alternative means to conduct your business, such as the hiring of additional or alternative staff; and/or
— services required to communicate with customers, such as Zoom or other communication tools or enhanced internet or telephone connectivity.
The steps you should go through to preserve your claim are as follows:
- Get a copy of your insurance policy;
- Find the information on where or how to tender a claim of any kind;
- Notify your insurance company, either in writing or by calling your insurance broker, that you want to file a claim for coverage for damage to your business and business interruption loss suffered by your business; and finally
- Keep good records of any and all damages your business may have incurred, or is continuing to incur.
If you have more questions about insurance issues, please contact a professional.
Talking to Your Landlord
The Los Angeles City Council has enacted an emergency order allowing small businesses to defer their rent payments for up to three months. If you need to do that, you should contact your landlord as soon as possible. Here is some language you can put in an email or letter (check the terms of your lease for how you are required to communicate with your landlord) to ask for that relief.
As a business that has been adversely impacted by the Covid-19 outbreak and the subsequent government-imposed operating restrictions, I am hereby invoking my rights under “Public Order Under City of Los Angeles Emergency Authority” dated March 15, 2020, requesting an abatement of my obligation to pay rent for [insert time period, not exceeding 6 months from date that moratorium was enacted / disaster declaration was made ]. I understand that I will have up to six months following the expiration of the local emergency period to repay any back due rent.
I understand that this is not a request to forgive my rent, but simply a request to delay my obligation to pay at this time and to avoid any actions seeking my eviction or other legal action to obtain rental payment at this time.
[name, name of business, signature and date]
Taking Advantage of Tax Relief
The Franchise Tax Board and the Internal Revenue Service have both delayed the tax filing and payment deadline for 2019 income taxes until July 15th, 2020. This delay also applies to the filing deadline of April 15, 2020 for making estimated tax payments. (Note that the second estimated tax payment deadline of June 15, 2020 may still apply, at least at the federal level.)
To the extent that employers are granting employees paid leave or are fully or partially shutting down due to governmental orders, California is offering payroll tax credits or payroll tax deferments that may be able to be immediately accessed as direct payments. Note that businesses choosing to access this California benefit currently are not eligible for SBA loans, but the landscape is changing rapidly so it’s best to speak to your accountant.
Links explaining these benefits more fully are included here:
Relief Programs and Loans Available Under Cares Act
On March 28, 2020 the federal government signed into law one of the biggest assistance programs in history. Pursuant to that law, small businesses can apply for low-interest loans that can be paid back later in the year through the Small Business Administration (SBA). There are two MAJOR programs now available, as well as a few smaller programs. The two major programs are described here:
The Economic Injury Disaster Loan (or the EIDL)
What is this loan for?
This loan will cover up to $2 million for your operating costs, including the following:
- Interest on Mortgages (business property); and
- Equipment Financing.
The terms are:
3.75% amortized for 15 or 30 years (determined by the credit officer), with payments deferred for 12 months. Up to $10,000 can be advanced quickly and it can be forgiven if used to cover 1-5, above.
Where to apply: https://covid19relief.sba.gov/
What you will need to complete the forms:
- Your company information (take this off of your federal tax return);
- Your owners’ information (this is everyone that owns 20% or more of your company);
- Your gross sales for the last 12 months;
- The cost of goods sold for the last 12 months; and
- The bank account and bank routing numbers where you want the funds deposited.
A few weeks after you apply you will be contacted by a credit officer. They will probably ask for more documentation. The type of information they will ask for can be found in the forms linked HERE
A FAQ on this program can be downloaded from the link HERE
The Payroll Protection Plan Loan (or the PPP)
What is this loan for?
This loan will cover a maximum amount of 2.5x your average monthly payroll prior to the “disaster.” (You can use the spreadsheet linked HERE to estimate your loan amount.). This loan can be used to cover:
- Payroll (must be 75% of total loan);
- Interest on Mortgages (business property); and
- Equipment Financing.
The loan is 100% forgivable if used for 1-5, above, and loan amounts that are not forgiven are payable at .5% over two years.
Where to apply: Any SBA approved lender (check with your bank to see if they offer the loan; some local Palisades bank branches that do list their contact information are below). Note that if your business has under 250 employees, you may want to consider using a community lender such as PCR or CDC Loan .
What you will need to apply: This ultimately will be up to the lender, but for these types of loans the process will be similar. A link to a sample set of forms is HERE:
A FAQ on this program can be downloaded on the link HERE
SBA Loan Forgiveness
Any business that has a current 7a, 504 or Community Advantage loan can get six months of principle and interest PAID by the SBA. You must contact your lender to apply, but they cannot refuse your request.
Information on that program can be found at the link HERE
Los Angeles County Small Business Help Center
This recently launched Small Business Help Center serves the following key functions:
- Provides a single-entry point for businesses and workers for questions about available disaster funding, unemployment, and the applicability of the public health orders
- Centralizes the County’s response to businesses and workers to ensure clear and consistent information
- Provides direct one-on-one assistance to those with immediate needs
The Help Center can be accessed by phone, web, and email:
(833) 238-4450 or Disasterhelpcenter@lacounty.gov
The user-friendly website provides L.A. County business owners and workers with the most up-to-date information about COVID-19 and resources available, including information about federal small business loans and unemployment assistance. The mobile-responsive website is also equipped with a translation feature that allows people to view the web pages in any language they choose. The website will continue to be fine-tuned by adding features that include a calendar of events and additional resources.
Resources for Restaurants
Restaurants have been especially hard hit, and the link below has especially useful information for restaurants, including a notice that should be printed out and posted by those restaurants choosing to selling alcoholic beverages for off-premises consumption pursuant to the current ABC waiver.
The people listed below have graciously offered to assist our small businesses in navigating this space, including in some cases on a pro bono basis. Please call on them for any and all needs.
For questions and assistance completing SBA loan applications:
Pacific Coast Regional
Small Business Development Center
“I am here to assist small business owners for as long as our office remains open. Contact me sooner rather than later.”
Ballard Spahr LLP
2029 Century Park East, Suite 800
Los Angeles, CA 90067-2909
424.204.4384 DIRECT 424.204.4350 FAX 858.254.2260 MOBILE
For local assistance applying for Payroll Protection Loans:
Personal Banker 2 Reg (SAFE)
NMLSR ID 1052746
Wells Fargo | 15240 W Sunset Blvd | Pacific Palisades, CA 90272
Tel 310-454-0159| Fax 310-573-4629
VP, Branch Manager Retail Banking
Banc of California
530 Palisades Drive
Pacific Palisades, CA 90272
Office:310-566-5190 Cell: 424-280-2411 Fax: 844-821-6021
This document and website: Palibiz.com, its design and all of its contents collectively are copyright Annine DeCew Madok and Palibiz.com 2020. All rights reserved.
The information and materials on this site and in this document are provided for informational purposes only. They do not constitute legal advice and you should consult with a qualified lawyer or other professional of your choice who is familiar with all the facts of your situation for making a decision about any legal matter. Your accessing of this document/website and the information contained herein does not create an attorney client relationship between any individual and you and or any entity you represent.
Note: this article is reprinted with permission.