Changes in the Paycheck Protection Program that benefit the smallest of small businesses
The Paycheck Protection Program has been one of the most visible programs inside the US Government’s response to the pandemic. The overall goal of the program was to get loans to small businesses to help them keep their staff employed as we entered the unknown waters of a pandemic economy. If these small businesses kept their staffs employed, these loans would be forgiven, and the loans would essentially convert into grants. There was recently a change to how much funding a small business would qualify for, and this change will have a dramatic impact on the smallest businesses who were previously either left out of the program or only qualified for a nominal amount of funds.
These changes revolve around people who report their business income using a Schedule C on their tax return. Schedule Cs are typically used for sole proprietors (fancy way of saying people who do business in their personal name with no formal entity like a LLC or corporation), but some LLCs also use Schedule Cs. Up until this point, these businesses would determine the amount of a loan they qualified for by combining the annual payroll costs of any employees with the net profit of the business. These two figures formed the basis of the calculation, and the idea was that these figures would represent the combined compensation paid the employees and the owner.
The unintended consequence of how the program was initially setup is that many of the smallest businesses operate at essentially a breakeven where income is nearly entirely offset by expenses. Due to this, the “owners” portion (net profit) could be very low or $0 which caused their PPP loan amount to go down. With the new changes, the “owner” compensation portion of the calculation has been switched from using the net profit to the gross profit. This change will dramatically impact the amount of PPP funds a small business can qualify for as well as even allowing some businesses with a negative net profit to receive PPP funds when previously they did not qualify at all.
These changes became effective on March 5th, and they will be in place through the end of the program on March 31st. This can have a massive impact on some of the smallest businesses in our community. Businesses that use Schedule Cs range from popup stands at the farmers market to businesses on Front Street. This group of businesses provide much of the vitality that makes Mankato special; so let’s get the word out so these businesses survive!
At Pioneer Bank, we have funded over 1,350 PPP loans for our community with a median loan size of $20,000. Most banks have access to this program, but anyone can feel free to send any questions to Clay Sharkey.
New Community Resource to Address Food Insecurity
In 2021, a new community resource will help South Central Minnesota businesses find a way to donate usable food and will help non-profit organizations seeking food to address food insecurity. With the support of community leaders, Wooden Spoon received a Prevention of Wasted Food and Food Rescue grant from the Minnesota Pollution Control Agency. This grant allows the ideas being discussed for some time to come to fruition and establishes the South Central Minnesota Food Recovery Project.
The project seeks to address two important social issues: food waste and food insecurity. The goal is to create a system for local businesses to donate safe, healthy excess food to be used by local organizations and coalitions serving people who are low-income and/or people who are Black or Indigenous or people of color (BIPOC). The grant will create a space for storage of donated items, a system to attain the food, and an app for communicating the availability of the food for use by the agencies that need it.
We are currently seeking input from local restaurants who are interested in reducing food waste and/or donating food. Please fill out the survey, found here: https://forms.gle/mDE3L2qL1m5DhsB58.
If you are unable or unwilling to fill out the survey, and still would like to have your voice heard, please contact me directly at natasha@woodenspoonmn.com or 213-675-1533.
GMG Q2 Report
Our entire team at Greater Mankato Growth, Inc. works each day to bring value to our members and drive increased vitality to the Greater Mankato region. To ensure that we’re effectively updating our partners and the community on our work, we revamped our annual report. Instead of a once-a-year 40+ page document, we’ve transitioned to a quarterly report in a new, condensed infographic layout. This has allowed us to streamline and considerably reduce staff time as well as printing costs all while making the content easier to digest, more immediate, and more impactful. I invite you to take a look at our Quarter 2 report.
GMG Q1 Report
Our entire team at Greater Mankato Growth, Inc. works each day to bring value to our members and drive increased vitality to the Greater Mankato region. To ensure that we’re effectively updating our partners and the community on our work, we recently revamped our annual report. Instead of a once-a-year 40+ page document, we’ve transitioned to a quarterly report in a new, condensed infographic layout. This has allowed us to streamline and considerably reduce staff time as well as printing costs all while making the content easier to digest, more immediate, and more impactful. I invite you to take a look at our Quarter 1 report.
Tax Bill Q&A for Agriculture
The newly passed tax bill has numerous implications that businesses from all sectors need to understand and prepare for. Agriculture is no exception. The following guest blog courtesy of CliftonLarsonAllen provides a helpful Q&A on what the new tax bill means for farmers.
Should you wish to discuss tax reform and its impact on you or your business, please be sure to contact one of our fantastic member businesses with tax expertise. Read More
Tax Bill 20% Deduction for Farmers
Many have heard of the new Section 199A in the Tax Bill which will allow owners of sole proprietorships, S corporations and partnerships to take a deduction of 20% against their income from the business. But how does this new provision impact farmers? The following guest blog courtesy of CliftonLarsonAllen helps answer that question. Read More
Why NOT to Build a Wall – The Economic Necessity of Immigration Reform
Join Greater Mankato Growth and your fellow colleagues for our May Public Affairs Forum Luncheon The Economic Necessity of Immigration Reform.
Wednesday, May 3
11:30 am – 1 pm
Minnesota State University, Centennial Student Union, Room 245
Hit read more for additional information. Read More
Earth Day 2016 | Taking Action
By: Sam Ziegler | Director of Project ABE
Earth Day 2016…a time to reflect and take action on making our community a better place. As an avid outdoors-man, farmer and dad protecting our natural resources is important to me as I’m sure it is to many of you. In order to protect the environment and meet the growing global demand for food means that farmers must produce more, using fewer resources through innovation and the responsible use of technology. The good news is that Minnesota farmers have been doing just that for decades. Read More
FOCUS ON AG
CELEBRATING NATIONAL AG WEEK
“National Ag Week” is being celebrated March 13-19 all across the United States, as well as in Minnesota, with Tuesday, March 15, being designated as “National Ag Day”. As we celebrate “National Ag Week”, it is a good time to reflect on all the traditions and advancements that help make the U.S. and Minnesota agriculture industry truly remarkable.
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Congress Experiences Christmas Miracle: Passes Major Legislation to End the Year
U.S. Capitol Building, Washington D.C.
Congress is ending 2015 by passing a flurry of legislation that will have substantial impacts on businesses and individuals alike. Included is the first long-term transportation bill in a decade, a major education reform bill, a tax bill that extends numerous tax breaks, and a spending bill that will fund the government over the next year. Here are key highlights: Read More
Fall always brings excitement in the Ag world
For a moment take a step back in time with me to understand why harvest is such an exciting time of year. Not back in time when you remember being on your ancestors farm or the nostalgic red barn period. I am talking about back to the beginning of this year’s crop cycle. Read More
It just makes sense!
Have you ever pondered what our region of the state, country and world has been built upon? Why did people settle here? What did they make there living from? What are our businesses in our communities great at today? Read More
