Category Archives: Illinois

May 2020 Chicago BACP Business Education Workshop Webinars


The Chicago Department of Business Affairs and Consumer Protection is no longer offering their usual onsite workshops, but they are announcing a few virtual ones — not a whole month at-a-time, so I’ll just append this post as I learn of new ones. Here’s what we know about so far.

Wednesday, 5/13 at 3:00 PM Webinar
Protecting Yourself Against Business COVID and Cybersecurity Scams – Stop Perpetrators in Their Tracks
Presented by the Better Business Bureau of Chicago and Northern Illinois and Sagin IT Services/Data Protection and Network Security

Better Business Bureau of Chicago and Northern Illinois and Sagin IT Services/Data Protection and Network Security will team up for “Protecting yourself against Business COVID and Cybersecurity Scams – Stop Perpetrators in their Tracks.”

Click here to register for the Wednesday, 5/13 Webinar. 

Thursday, 5/14 at 9:30 AM Webinar
Paycheck Protection Program & Other SBA Resources for Small Businesses
Presented by the SBA Public Affairs Specialist Jessica Mayle

If your small business has been impacted by coronavirus, join this free online training to learn more about serveral funding programs to address the COVID-19 outbreak, including the Paycheck Protection Program.  We’ll discuss eligibility requirements, how to find a lender, and timelines for disbursement. Bring your questions.

Click here to register for the Thursday, 5/14 Webinar. 

Friday, 5/15 at 9:30 AM Webinar
Manage Your Business Remotely
Presented by JinJa Birkenbeuel, Birk Creative, A Certified Grow With Google Partner

In this live class, I will share the free and easy to access Google tools that can help you stay productive no matter where you are.
In this session we’ll show you how to:
– Update your customers with critical business information through your Business Profile, Google Ads, and your website.
– Communicate remotely with your customers and employees with tools like Google Meets and Gmail, and how to access and collaborate on files with your team through Google Drive.
– And we’ll share next steps and resources available to help you manage remotely.

Click here to register for Friday, 5/15 Webinar. 

Wednesday, 5/20 at 3:00 PM Webinar
A Focus on Empathy: Storytelling in Branding
Presented by Adam Arcus, VP, Creative at 1871

Learn the importance of storytelling in branding that engages empathy alongside design, multimedia, and copywriting with Adam Arcus, VP, Creative at 1871. Take away tangible and actionable methods on how to lead with empathy as a business in order to connect with your customers during the Coronavirus Pandemic including: memory making science, multimedia storytelling made simple, and the importance of narrative in a brand.

Click here to register for the Wednesday, 5/20 Webinar.

Friday, 5/22 at 9:30 AM Webinar
Small Business Capital and Coaching During the Recovery
Presented by Accion Serving Illinois & Indiana

As Chicago’s economy starts to reopen, how can your business be best prepared? Join this presentation, with moderated Q&A after, in which Accion Serving Illinois & Indiana CEO Brad McConnell will discuss capital and coaching options for small business during the COVID-19 recovery period.

Click here to register for the Friday, 5/22 Webinar.

Wednesday, 5/27 at 3:00 PM Webinar
Transform Your Dream Into a Real Startup
Presented by Score Chicago

Do you have what it takes to start and run a successful business? If so, do you know what the start-up journey is like? Or what initial steps you need to take?  This webinar will help you assess your prospects, give you the initial direction you need, and inspire you to move forward to realize your dream. The webinar will also cover pricing, promotion, competition and marketing to give you a competitive edge.
Topics Covered in the Start-up Webinar:
· Identifying Successful Traits
· Assessing Your Journey
· Navigating Organization and Regulations
· Gauging Market Potential
· Avoiding Failure

Click here to register for the Wednesday, 5/27 Webinar.

Friday, 5/29 at 9:30 AM Webinar
Marketing Strategy and Tactic
Presented by Chimbly Consultants

Are you wondering what a marketing strategy can look like? Are you interested in learning about how marketing tactics are connected to strategy? In this workshop, Francisco Ramirez from Chimbly Consultants will cover the basics of marketing starting with strategy. Participants will leave with an understanding of the importance of marketing strategy and what tactics to use and measure to be successful in business. 

Click here to register for the Friday, 5/29 Webinar.

Please email BACPoutreach@cityofchicago.org with any webinar questions.

Previous Webinars:

  • To view the Paycheck Protection Program & Other SBA Resources for Small Businessesclick here.
  • To view the Resources Small Businesses During the COVID Pandemicclick here
  • To view the Navigating the New Stay at Home Orderclick here.
  • To view the Workers’ Rights and Resources During COVID-19 webinar -Spanishclick here.
  • To view the Workers’ Rights and Resources During COVID-19 webinar -Englishclick here.

Partner Webinars:

  • To view the Coronavirus (covid-19): Small Business Guiance & Loan Resources by The Small Business Administration (SBA), click here.
  • To view Coronavirus (covid-19) Small Business Guidance & Loan Recovery for Sole Proprietors by The Small Business Administration (SBA), click here

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Illinois State Unemployment Now Open To Self-Employed – May 11


Per Becky Canary-King at Levenfeld Pearlstein LLC:

Earlier this week, the Illinois Department of Employment Security (IDES) released new instructions for 1099 workers who have lost work due to COVID-19. The new Pandemic Unemployment Assistance (PUA) program provides 100% federally-funded unemployment benefits for individuals who are unemployed for specified COVID-19-related reasons and are not eligible for the state’s regular unemployment insurance program. Workers, including independent contractors, who believe they may qualify for new federal benefits under PUA must first apply for regular unemployment insurance before applying for benefits under PUA. The new PUA application portal is set to open on May 11. 

Those new instructions from IDES indicate the following:

Workers who believe they may be eligible for new federal benefits under the Pandemic Unemployment Assistance (PUA) program must first apply for regular unemployment insurance before applying for benefits under PUA when a new application portal opens on May 11, 2020 via the IDES website.

If claimants receive an eligibility determination of $0, they can then appeal that decision by providing verification of wages earned, or they can submit a claim for PUA benefits. Claimants who have already applied for and been denied regular unemployment benefits can submit a claim through the new PUA portal when it opens. Receiving a denial for regular unemployment benefits is a mandatory first step in determining eligibility for PUA.

Filing for regular unemployment also provides claimants the opportunity to select how they want to receive benefits. Eligible claimants can choose between direct deposit or a [Key Bank] debit card onto which their benefits will be loaded. Debit cards can take up to one to two weeks to receive in the mail while direct deposit payments take two to three days once a claimant completes their weekly certification for benefits.

PUA provides 100% federally-funded unemployment benefits for individuals who are unemployed for specified COVID-19-related reasons and are not eligible for the state’s regular unemployment insurance program, the extended benefit (EB) program under Illinois law, or the Pandemic Emergency Unemployment Compensation program (PEUC), including independent contractors and sole-proprietors. Up to 39 weeks’ worth of benefits are potentially available under the program for COVID-19-related unemployment claims.

PUA claims will be backdated to the individuals’ first week of unemployment, but no earlier than February 2, 2020, and will continue for as long as the individual remains unemployed as a result of COVID-19, but no later than the week ending December 26, 2020. The program is similar to the federal Disaster Unemployment Assistance program which provides unemployment benefits in response to local disasters.

IDES Website, May 11 2020

From the feedback I’ve gotten from clients, even if you recently received PPP funding, you can apply for back-pay for the past two months — then you only certify for the weeks up until you received the PPP loan funds. You’ll indicate that you file Form 1040, as both your partnership income will show up there (Schedule E) and your sole proprietorship income will show up there (Schedule C). You’ll need to provide your 2019 tax returns, and income numbers from the return’s front-page. You also will need your driver’s license and social security numbers, and you’ll need to pick an appropriate job title/description.

To reiterate, you have to apply for regular unemployment and get denied first. Then on the middle of the regular unemployment page (as in, about halfway down) — there’s a button that says “certify for PUA” — it actually contains the application as well as the certification. You follow the prompts, answer the questions, upload your tax documentation… and wait.

Many thanks to the clients and colleagues who assisted in updating me with their personal experiences! If you have more to add, please do so in the comments rather than emailing me directly, so more folks can benefit from your experiences.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Why Aren’t Insurance Companies Paying Business Interruption Claims?

According to Antonio Romanucci, a speaker on today’s Crain’s “Crisis Relief for Businesses” webcast, he has yet to see a single insurance company honor a business interruption claim due to COVID-19 and the resulting stay-at-home orders.

As he points out in this article:

The devil is in the details here, and there are several parts of insurance policies that are at the heart of the discussions:

  • Does a policy cover “All Risks” against loss or physical damage or is there “Stated Peril” for loss or damage to policies based on certain, covered causes?
  • Is there coverage for losses due to decisions or directions by a Civil Authority, like the government directed shutdown of non-essential businesses?
  • Is there a Virus Exclusion that does not cover losses due to viruses or bacteria, which could be general or name specific viruses or bacteria?

Regardless of the language in their policy, business owners should file a claim in writing to determine their insurance company’s response and, if the claim is denied, consider a conversation with a legal expert to have their policy reviewed and consider possible next steps, which could include the filing of a legal complaint to bring in the judicial system to review the insurance contract and declare whether or not coverage is deserved.

Insurance companies have collected billions of dollars in premiums that should first be paid to policyholders to keep those smaller businesses from going bankrupt.  If the pandemic leads to critical financial strain on the insurance industry, then those enormous corporations should turn to the federal government for a bailout, very much like what is being given to the airline industry.

Read the full article here:
https://rblaw.net/covid-19-has-devastated-the-restaurant-industry-why-arent-their-insurance-companies-helping/


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

FREE Webinar May 1 – Shifting Your Business Online

This Friday 5/1 at 9:30 AM — FREE BACP Webinar: Shifting Your Business To Online (E-commerce).

I have a lot of small business clients in retail and services that could use some assistance pivoting their offerings online, and am hoping this webinar can provide a jumping-off point.

Presented by World Business Chicago – Join 37 Oaks Consulting, ChiBizHub, World Business Chicago and City of Chicago Business Affairs & Consumer Protection (BACP) for an informational webinar to help inspire you on ways you can shift, move or elevate your business to an e-commerce model.

The webinar is free, but you must register here for login info:
https://www.eventbrite.com/e/shifting-your-business-to-online-e-commerce-tickets-103549621706


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Chicago BACP Outlines Important New Rules for Businesses

From the Chicago Department of Business Affairs and Consumer Protection, April 27th, 2020:

On Thursday, April 23rd, Governor Pritzker announced an extension of the Illinois Stay at Home Order to the end of May. Under this extension, there will be important modifications to the Stay at Home Order that will come into effect on May 1st. These modifications provide increased flexibility for certain businesses and important new guidelines to protect workers and consumers.

Here is an overview of the changes that will become effective May 1st and will last through the month of May. Please note that these rules are subject to change- please visit www.chicago.gov/coronavirus for updates.

1. NEW Requirement to Wear Face Coverings
Effective May 1st, all individuals over the age of two that can medically tolerate face covering will be required to wear a face covering over their nose and mouth when they are:

  • in a public space and unable to maintain a six-foot social distance; or
  • in any indoor public space.

2. NEW Categories of Businesses Considered Essential
The following businesses will be considered essential and may re-open beginning May 1st:

  • Animal Grooming Services
  • Greenhouses, Garden Centers and Nurseries

These businesses will be added to the full list of essential businesses under the previous Stay at Home Order, which can be found on the Frequently Asked Questions tab at www.chicago.gov/coronavirus. All essential businesses must follow the social distancing requirements outlined in number four below.

3. NEW Permissible Activities for Non-Essential Businesses
Beginning May 1st, retail stores that are not designated as essential may re-open to fulfill online or telephone orders. These orders must be completed through pick-up outside of the store or through delivery. All non-essential businesses engaged in minimum basic activities such as these must follow the social distancing requirements outlined in number four below.

4. NEW Requirements for all Businesses to Protect Employees and Consumers
Effective May 1st, all businesses are required to take the following steps to the greatest extent possible:

  • Provide employees with face coverings
  • Require that employees wear face coverings in circumstances where they are unable to maintain a six-foot distance at all times
  • Where work circumstances require it, provide additional Personal Protective Equipment
  • Evaluate whether employees are able to work from home

This applies to all essential businesses and non-essential businesses that are engaged in minimum basic operations. These requirements are in addition to existing requirements to designate six-foot distances, have hand sanitizer and sanitizing products available, designate separate operating hours for vulnerable populations and post online whether a facility is open and how best to reach the facility.

5. New Requirements for Retail Businesses to Protect Employees and Consumers
In addition to the requirements outlined in number four above, all retail businesses are required to take the following steps to the greatest extent possible beginning on May 1st:

  • Cap occupancy at 50 percent of store capacity or occupancy limits
  • Set up store aisles to be one-way where practicable
  • Communicate with customers through in-store signage, public service announcements and advertisements about the social distancing requirements
  • Discontinue use of reusable bags

6. NEW Requirements for Manufacturers to Protect EmployeesIn addition to the requirements outlined in number four above, all manufacturing businesses are required to take the following steps to the greatest extent possible beginning on May 1st:

  • Stagger shifts
  • Reduce line speeds
  • Operate only essential lines, while shutting down non-essential lines
  • Ensure that all spaces where employees may gather, including locker rooms and lunchrooms, allow for social distancing
  • Downsize to the extent necessary to allow for social distancing

Please be advised BACP has been and will continue to enforce the Stay at Home Order. Citations for businesses violating the order, including the social distancing requirements, can range up to $10,000 per offense. The modifications in the new Stay at Home Order are essential to building on the lifesaving progress our State has made over the last month.

Note: BACP Upcoming Webinars Are Listed Here.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Illinois Unemployment Claimants Concerned With Change In IDES Policy

I received a call and email today from a concerned Illinois citizen, trying to bring awareness to what seems like a serious error on the part of the Illinois Department of Employment Security (IDES). I have contacted our State Representative’s office and they are looking into it. I will post an update here when I have one; in the meantime, here is the information I received — just in case you are struggling with the same issue, you can know you’re not alone, and folks are indeed trying to get it addressed.
Note: I have not yet vetted this information… it was provided to me via an individual who is not a client.

Summary: The state of Illinois shut down on March 20th, and the CARES Act, including the Federal Pandemic Employment Compensation (FPUC) passed on March 27th. Even before it passed, the official message from the State of Illinois was that there was no different way to apply for the federal aid aside from applying normally for state unemployment. IDES posted on their FPUC FAQ that individuals otherwise eligible for unemployment during the weeks of the program would be eligible for and receive the increased assistance. They also wrote that the additional $600 per week would be active in benefit payments for unemployment certifications (not applications or claims) completed starting April 6th. Then, on April 15th, they retroactively decreed through a PDF that anyone who had any claim for benefits pending or active before March 29th would be denied the FPUC.

The IDES is not applying the $600 FPUC increase for mandatory COVID-19 economic shutdown to people receiving regular unemployment benefits (in violation of the federal implementation guidelines and the CARES Act).

IDES put out this fact sheet where they claim, “Pursuant to the federal legislation, this $600 will not be retroactively applied to unemployment claims that arose prior to March 29, 2020
https://www2.illinois.gov/ides/News%20%20Announcements%20Doc%20Library/Federal-Stimulus-FAQ-April2020.pdf

While the $600 payments cannot be retroactively applied to before the CARES act took effect, it is incorrect to not apply the $600 to later weeks for those with existing claims started prior to March 29th. There is no requirement in CARES FPUC that individuals may not already receive unemployment benefits or forfeit eligibility. In fact, the opposite is true, and the $600 is an increase to existing benefits.

The IDES COVID FAQ also states the correct interpretation in their FPUC FAQ:
Who is eligible to receive FPUC?
FPUC is payable to individuals who are otherwise eligible for unemployment benefitsfor weeks of unemployment beginning March 29, 2020 and ending July 31, 2020
https://www2.illinois.gov/ides/Pages/COVID-FPUC-FAQ.aspx#h2

IDES provides no alternative method to apply for or receive federal assistance beyond applying for normal state unemployment benefits. After certifying for benefits through 4/18, [this claimant] still has not received additional payments from FPUC/CARES, even though the IDES website had indicated that FPUC would be included for eligible recipients with their normal benefits starting April 6th:

“The $600 federal increase is now available! Those claimants certifying beginning April 6 will see the additional supplemental income applied to their weekly benefit amount. This increase is available through the week ending July 25, 2020.”
https://www2.illinois.gov/ides/Pages/default.aspx

Due to the fact that [this claimant] has seen no additional $600 materialize, and the IDES changed the wording in their April 15th PDF, it seems they may have mistakenly adjusted the policy to not grant the $600 to recipients in this situation. IDES had not previously stated that claimants had to wait until after March 29 to apply to get FPUC — in fact, they indicated the opposite: that people should apply normally, and once it was enacted and implemented they would start seeing the additional funds.

Those who apply before March 29 are still eligible for benefits for weeks after March 29th, and thus still eligible for FPUC.  The date of March 29th is to start $600 payments, not to cut off eligibility. This seems to be a serious error.

(Federal guidelines for the law are copied below for reference.)

CARES FPUC Guidelines:
C. Operating Instructions.
1. Eligibility for FPUC.
For an individual to receive FPUC, the applicable state must have a signed agreement with the Department. FPUC is payable to individuals who are otherwise entitled under state or federal law to receive regular UC for weeks of unemployment (including Unemployment Compensation for Federal Employees (UCFE)and Unemployment Compensation for Ex-Servicemembers (UCX)). FPUC is also payable to individuals receiving the following unemployment compensation programs: PEUC, PUA, EB, Short-Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and payments under the Self-Employment Assistance (SEA) program. A number of state laws include provisions extending the potential duration of benefits during periods of high unemployment for individuals in approved training who exhaust benefits, or for a variety of other reasons. Although some state laws call these programs “extended benefits,” the Department uses the term “additional benefits” (AB) to avoid confusion with the Federal-State EB program. FPUC is not payable to individuals receiving AB payments.
2. FPUC Eligibility and Relation to Other Types of Benefit Payments.
Individuals receive FPUC payments concurrently with payments under those programs identified above. Refer to UIPL 14-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 –Summary of Key Unemployment Insurance (UI) Provisions and Guidance Regarding Temporary Emergency State Staffing Flexibility, issued April 2, 2020, for additional information on how FPUC interacts with other programs authorized under the CARES Act.States that are unable to immediately pay benefits the week following the execution of the agreement with the Department to operate the program must provide retroactive payments to individuals eligible for FPUC for the weeks they would have been entitled.

https://wdr.doleta.gov/directives/attach/UIPL/UIPL_15-20_Attachment_1.pdf

Here is the full UIPL 14-20 —
https://wdr.doleta.gov/directives/attach/UIPL/UIPL_14-20.pdf


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Self-Employed To Begin Receiving Unemployment Benefits May 11

UPDATE MAY 11 — see new post here:
http://www.thedancingaccountant.com/?p=1611

Many of my clients are self-employed (they file Schedule SE to pay payroll taxes on their income tax returns, rather than receiving a W-2 as an employee), and therefore are not required to pay into the state’s unemployment fund at the Illinois Department of Employment Security. This also means that they are not allowed to draw on the unemployment system.

However, with the current pandemic raging, the government recognized that these folks need the same safety net the rest of society can count on, and states were instructed to make benefits available to them.

There were a few problems with that. Although the federal government instructed states to cover self-employed people — this includes sole proprietors who have employees, as well as folks who don’t think of themselves as running a business: gig workers, independent contractors, and those performing odd jobs for a living — it unfortunately did not give states any guidance, budget or other resources for how to make that happen.

First-off, keep in mind that unemployment claims have skyrocketed. In one month, IDES has received more claims than in all of 2019. Staff are overworked, and being asked to come into an office instead of working from home, because data security issues have always required it. Many folks have become sick and had to take time off, or are struggling with childcare issues due to schools being canceled.

Then take into account the fact that most state unemployment computer systems are ancient in terms of technology. Many are actually written in COBOL, a language in wide use in the 1960s. So when these programs break, there aren’t a lot of software developers around who can fix them — to the extent that IBM is actually offering free COBOL classes to computer programmers (even beginners) in hopes they can help out some of these agencies. It’s already hard enough to work with these legacy systems… but reprogramming them to accept an entirely different application, documentation and workflow (self-employed people don’t have paystubs or W-2s to prove income) is a huge overhaul project in itself. (Which they don’t have time to do because claims have skyrocketed, they are overwhelmed, and understaffed.)

Furthermore, the staff working at state unemployment agencies aren’t trained to review this new documentation, or to make calculations as to the amount of benefits to which they’re entitled. Reviewing tax returns is simply not the same as reviewing paystubs and W-2s, and this will take some time — new rules will have to be devised, new procedures created, and then employee training will have to occur… all while a pandemic rages and folks are (see above) overwhelmed and understaffed.

So when I read comments like that of Morgan Ione Yeager from Highland Park, who is “appalled and disgusted” by the delays and claims, “there’s no reason why it needs to be this difficult,” I can’t help but wonder what she knows, about software programming and benefit calculation training while being overwhelmed with an unprecedented number of current claims and working onsite with insufficient protections… that I don’t.

Which is to say — this situation is indeed horrible, and difficult, and sad. But please remember these are human beings trying to make this happen.

Enter some good news. An entirely new system specific to self-employed workers is being written in a period of weeks in order to have things up-and-running as soon as possible, with benefits rolling out around May 11th, reports the Chicago Sun-Times.

In addition to the new system, other “upgrades include: recruiting retired IDES employees to come back to work; boosting IDES’ phone system capacity by 40% plus extending daily call center hours; opening another call center with 200 employees’ and hiring consultants to overhaul and build new IDES platforms.”

In the meantime, I recommend you continue to watch the news and the IDES site — please check it no more than once-a-day, to reduce the load and make it easier for others applying for benefits — and be ready with whatever you have that can support your calculation of your annual income, such as a tax return, 1099-MISC forms you have received for work performed, or a statement print-out of earnings from the company for whom you are a contractor. You may wish, as a former administrative law judge for IDES has recommended, to write a letter with the initial date you stopped receiving income and attempted the unemployment application submission, just to make sure you have backup illustrating you began the process (to me, this seems like it would clog the system up further, but if there’s any concern about your claim not being honored, it seems like a reasonable approach).

For more information on how unemployment benefits vary so widely from state-to-state, check out this great article. The number of complicating factors involved makes apples-to-apples comparisons almost impossible.

And… if you’ve got some free time on your hands and are interested in a career change, don’t forget about those free COBOL classes.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Student Loan Relief for Illinoisans

New financial relief for student loan borrowers who were not covered under the federal CARES Act was announced by Governor JB Pritzker:

“Under this new initiative, Illinoisans with commercially-owned Federal Family Education Program Loans or privately held student loans who are struggling to make their payments due to the COVID-19 pandemic will be eligible for expanded relief. Borrowers in need of assistance must immediately contact their student loan servicer to identify the options that are appropriate to their circumstances. Relief options include:

– Providing a minimum of 90 days of forbearance
– Waiving late payment fees
– Ensuring that no borrower is subject to negative credit reporting
– Ceasing debt collection lawsuits for 90 days
– Working with borrower to enroll them in other borrower assistance programs, such as income-based repayment.”

To find out if you qualify for this relief, please contact the U.S. Department of Education’s Nation Student Loan Data System at NSLDS.ed.gov or 1-800-433-3243 for questions about federal loans. For private loans, please contact your lending company directly.

You can find more information on this program at https://coronavirus.illinois.gov/s/student-loans.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Small Business PPP Frustrations – Interview with Block Club Chicago

I was honored to be interviewed for and quoted by Block Club Chicago in their article entitled, Chicago Small Businesses Shut Out Of Federal Government’s Loan Program. (It was especially interesting to be surrounded unexpectedly by some beloved clients and former clients in the same article.)

Of course, no article can publish more than a few words here or there by any one person, so I’m sharing the entire email interview Q&A here on my blog. Feel free to quote me.

What’s it been like to be a small business accountant this last month? Are you inundated with calls and emails? 

Absolutely. The questions started right after the Families First Act came out on March 18th, with confusion about the requirement to offer paid sick and family leave, and how to get reimbursed by the government for it. Then the CARES Act came out on March 27th – and it’s been a more-than full-time job since then. Just the research and analysis portion is many hours per day… and responding to clients, writing blog posts and email blasts, and helping people with calculations has made it even busier than tax season usually is (which of course I’ve fallen behind on due to all of this).

It’s been impossible to get back in touch with everyone – there just aren’t enough hours in the day – so I decided on April 3rd to start offering a free daily Zoom Q&A for any client who’s interested, since so many people are asking the same questions, and we can all learn from each other’s experiences. That’s been a huge help, and has led to my doing similar sessions for other groups, like the Logan Square Chamber of Commerce, various professional accounting organizations, and hopefully soon, a Town Hall with our State Rep, Will Guzzardi.

There’s just so much misinformation out there caused by poor guidance, regulations that make no sense, and some terribly-written legislation that is so vague, it creates more questions than it answers. Add to that the panic everyone is feeling, and you get a lot of rumors. Dispelling those and clarifying what’s what has felt like the best way to contribute to the small business cause. I’ve decided not to charge any of my clients for work on COVID-19 relief resources, with the idea that keeping these businesses alive should be my main goal, or the fabric of the Logan Square community I’ve called home for over 20 years will be ripped apart. I don’t want the chains – those with capital to survive this period – to swoop in after all the small businesses disappear. We’ve got to do everything we can to keep them going.

What percentage (roughly) of small business owners who you work with are getting grants — city or federal — right now?

Among my clients, these are the stats:

EIDL – 5% of applicants
PPP – 6% of applicants
Chicago Resiliency Fund – 0% of applicants; in fact I don’t know anyone who has received anything from this fund, which was supposed to be a bridge loan until you could get other relief.
IL Hospitality Grant – 0% of my clients who applied; though I know in actuality the number is closer to 5% overall.

To clarify, there are other sources for relief that do not require an application and approval, such as the Employee Retention Tax Credit, or the Payroll Tax Deferral Program – both of which an employer claims on their payroll tax return; but this requires that they are still paying their employees and does not account for those who do not have sufficient revenues or savings to make that happen.

Have any of the small business owners you work with gotten the PPP loan?

Yes, one was already funded, and two more have signed with confirmations from their bankers that the money is on the way. A couple were in the 72-hr waiting period and lost it. This is out of nearly 70 applications, that we spent the past three weeks preparing. I’m seeing similar low percentages among colleagues’ clients.

UPDATE: as of April 19, a total of five of my clients received funding.

Has the PPP loan been a source of frustration among small business owners you work with?

I don’t mean to be rude, but this is an almost laughable question. At least, it would be if everything hadn’t ground to a halt yesterday, leaving hundreds of thousands of applications stranded, and along with that, many businesses that may have to declare bankruptcy. I haven’t slept for two nights because of it. A dear friend is a Senior VP at a major bank and she shared the news of the funding running out the second it came to her. She said that is was among the worst days of her career – so much anguish and angst for their customers, so many people waiting for fund replenishment, irate and desperate clients full of ire and threats, and her own emotional exhaustion and anxiety through the roof. She said – and this rings so true for me as well – “It’s not my fault, but it is my problem, and I can’t fix it”.

But even before the funding ran out, there were so many sources of frustration:

  • There were no templates or calculations released by the SBA, and the regs and guidance were so vague that multiple rounds of guidance were released. The most recent was named the “Second PPP Interim Final Rule”, if that gives you any sense.
  • Bankers were so busy at their jobs that they couldn’t take three hours a day to do continuing education from the daily guidance their companies and the SBA/Treasury were releasing; this caused them to give inaccurate guidance to their customers, who would go to their accountants for help, and find that not even their accountants necessarily knew all the rules. And when they did, they’d have to go back-and-forth and accountants would effectively train their clients’ bankers on the regs.
  • Banks are required by the federal government to follow “Know Your Customer” and “Anti-Money-Laundering” rules, which made it almost impossible to take care of anyone who wasn’t a current customer. This had small business owners freaking out, if their bank was slow to respond and they tried looking elsewhere. Congress tried to tell banks not to do this, but the courts allowed it, since it was precisely because banks were trying to follow the previously-existing federal regulations set upon them.
  • Banks said they were processing applications in order, but that turned out to be a bald-faced lie for some. I know of folks who applied with Chase for example, on the same day, and one had their money in-hand by the 15th, whereas others were still waiting to hear back from anyone, their applications presumably sucked into a black hole.
  • There was a big exception that I see as a loophole in the law: allowing anyone in the hospitality industry to consider EACH LOCATION as separate – meaning a restaurant group or chain could apply for the $20M maximum for each of their locations, effectively giving big companies a major opportunity to grab funding meant for small-to-medium businesses.
  • I think perhaps most frustrating, though, was that it’s clear that companies with capital and resources hired attorneys and accountants to jump on this the second it came available. These bigger companies have bigger payrolls and therefore were more likely to request the full $10M per location (as opposed to about $20-50K per each of my clients). They also tend to have existing relationships with banks, such as a business Line of Credit, so they had a real person they could call and get in line immediately. They used up the funding, leaving little left for those without the resources to apply immediately.

Check out these stats on PPP funding compiled by a couple of my colleagues, and you’ll see how the average loan went down over time, supporting the theory that those with resources applied first, were approved first, and were granted more money.

UPDATE: Further analysis shows how differently each state was treated with regard to PPP funding as a percentage of the eligible payroll population, and how small businesses received 74% of the loans, but only 17% of the funds. 70% of the loans were made in amounts greater than $350,000, and the average loan was over $200,000. In fact, the biggest 14 lenders, according to the SBA, had average loan amounts well over $200,000, with the biggest lender of all reporting average loans of $515,000.

Do you have any advice for small business owners right now?

Yes, quite a few suggestions:

  1. If you still have staff you’re paying, I recommend taking advantage of the Employee Retention Tax Credit that you get by reducing your required regular payroll deposits, and applying for the balance on Form 7200. I know that Gusto (my favorite payroll company) is helping many of its clients through this process, which provides immediate cash in the form of payroll tax payments that don’t have to be made (in essence an advance on the credit). Treasury was initially telling us that you could not do this and PPP at the same time, but it turns out they are working on a way for folks to take advantage of ERTC and simply have it deducted from the PPP forgiveness should the business end up with PPP funding.
  2. Payroll Tax Deferral – similar to the above, in the sense that you only benefit from this if you have staff still on payroll (or yourself if you are a shareholder-employee), but this one is just a delayed payment of the employer portion of Social Security taxes. Again, I know Gusto is doing this for their clients on request. And again, guidance initially indicated that you couldn’t do this and PPP, but has since indicated that you can defer these payroll taxes until the end of the PPP forgiveness period, and the original due dates for the deferment will stick. More info here:
    https://www.akerman.com/en/perspectives/interplay-between-paycheck-protection-program-loans-and-payroll-tax-provisions-under-ffcra-and-the-cares-act.html
  3. EIDL – the Economic Injury Disaster Loans are still an option. Only the advance is forgiven, and there’s no way to know how much of an advance you’ll get (though in general it seems to line up with $1K per employee), but if you need cash, you should apply. If you request $25K or less, there’s no personal guarantee or collateral required.
    (Note: since the writing of this, EIDL funding has also been exhausted, but is likely to be replenished with the upcoming relief bill expected to be signed April 23rd.)
  4. Regarding the PPP:
     – Get your PPP application in order if you do not already, and ask around to other small businesses who did get funded to identify a bank that has more of a success rate than others. Have everything ready-to-go the second that the PPP receives more funding. Keep in mind that the SBA has said that they are not maintaining a queue of applications that were submitted to them by banks. There is no saying whether your banker will keep your place in-line internally, either. So be ready just in case you have to resubmit your application. I have quite a few resources and a checklist on my blog at http://www.thedancingaccountant.com
     – Similarly, work with your accountant to establish a plan for tracking the loan for forgiveness, so you have everything set up properly from the moment the funds are received. Make a plan to structure your forgiveness-period payroll to ensure the maximum amount of the loan will be forgiven.
     – And make sure you have a business checking account! Some folks are using personal checking accounts for their business – these rules about this changed four years ago, but some were apparently grandfathered in, and these small business owners are finding that the banks will not even consider their applications as a result – even though they’ve been banking there for ages. The banks are prohibited from depositing PPP funds into a personal account.
  5. If you haven’t already, start redefining your business model now. Even once the stay-at-home order is lifted, it might be quite some time before people are comfortable shopping or dining or drinking out. Research alternative models; ask around as to what other businesses are doing; investigate new revenue streams.
    Some examples: online sales, pairing with other businesses to deliver/ship care packages, going to a 100% take-out model with a contactless pick-up window, having staff take care of customer ordering and deliveries instead of GrubHub or Caviar, increasing your marketing and social media presence and improving the website, offering in-demand products along with your usual offerings, such as groceries or alcohol, teaming up with your local Chamber of Commerce to establish a virtual neighborhood store, etc.
  6. Go on unemployment. If you’re no longer able to pay yourself, or you’re paying yourself a substantially reduced salary, you may be eligible. Shareholder-employees are already eligible (they receive W-2s from their own companies and have been paying into the system all along), and hopefully in a few weeks we’ll see sole proprietors and partners in partnerships able to apply. (IDES is simply not set up to receive their applications yet, as they need totally different information than W-2 employees. Neither their systems nor their staff have the ability to accept this info yet.)
  7. Remember that there is currently no 10% penalty for withdrawing retirement funds – if you feel confident that you can survive this period but need cash now to do it, consider accessing those accounts now.
  8. Cash flow forecasting is something I wish all small businesses did, but they don’t. Consider working with your accountant to build a cash-flow projection system to figure out how to get through this. CashFlowTool.com is a great resource, and they offer free webinars on how to forecast, if you don’t have a professional you can go to.
  9. And I know this sounds insane… but try to take moments, tiny little vacations, away from your anxiety. I have to tell myself this every day. There is so much that is out of our hands; we have to work on the things over which we have control, and try to let go of what we don’t. The world isn’t working the way we want it to, or maybe even thought it did. For a lot of us, that’s a shock, and the emotional weight of that can pull us down. To survive this, we’ll need to shake off the anxiety and plan for a brighter future.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Chicago Resiliency Fund Proving Not To Be Very Resilient

UPDATE 6/13/20: As of this week, I only have one client who has reported hearing back from this program at all. And that was just an email saying there were 1500 people in-line in front of them and funds were unlikely to be available.


From Crain’s Chicago today —
The city’s Small Business Resiliency Fund has been swamped with about 7,000 applications since starting to receive them on March 31, and has approved just 10 applications as of yesterday evening, a city spokesperson said.

Warning: the rest of this is an op-ed vent, not my usual constructive information and advice.

Honestly, I’m heartbroken. I attended a webinar where the head of BACP told everyone to apply, even if you decide not to take the loan, because the program is designed to connect you with community development lenders who can advise you on the best combination of loans and grants for your business’s needs. These are places I trust, like Accion and WBDC. But to-date, not a SINGLE client has even heard back from the lender with whom they were paired. Not just that the applications are taking a long time — I mean, they haven’t even had an initial contact yet.

I understand the City is swamped and overwhelmed, and I truly believe they’re doing their best… but their best simply isn’t good enough. These were supposed to be the bridge loans that helped small businesses until they received their PPP or EIDL funding. I feel stupid for trusting them, embarrassed that I recommended this approach to my clients… and shocked that we have plumbing and traffic signals.


If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.