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.
First National Bank Minnesota is a full-service financial institution headquartered in St. Peter, Minnesota, with banking offices in Mankato, St. Peter, Gaylord, and Belle Plaine. Our primary geographic market covers a large area in south central Minnesota, including Nicollet, Blue Earth, LeSueur, Scott, Carver, and Sibley counties.
This is a guest blog post written by Ashley Hanley of Greater Mankato Growth member business, Radio Mankato.
Radio Mankato is proud to help our local restaurants during these challenging times.
That is why we have launched the Restaurant Rally. The Rally takes place every Tuesday in December from 9-10 a.m. with Lisa Kaye and Crew on Minnesota, which can be found on your radio dial at 93.1 FM.
All commercials and music will be paused during this time. Restaurant and business owners are encouraged to call the station during that time, free of charge, to let our listeners know of services, deals and ordering information.
This is the first time in Radio Mankato’s history that we have paused live music and commercials. However, we as a station felt this is one small way we could help give back to our local businesses and help rally together.
The phone number to call is: 507-625-9393.
Any local business is encouraged to participate.
Thank you to sponsors Prime Source Funding, Drummer’s Garden Center and Floral, and United Prairie Bank.
Member guest blog post, submitted by EideBailly. This article originally appeared on EideBailly.com
The government has released several updates to its Paycheck Protection Program (PPP) loan forgiveness guidance over the last few weeks. Here is a brief summary to help guide you through the PPP loan forgiveness process. Read More
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.
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.
(Warning: Transformation Ahead)
While not likely new to any of you, I’ve been a multiple cancer survivor for more than two and a half years. During that time, I have been blessed to have phenomenal, integrated and patient centric health care from the Mankato Clinic, Mayo Clinic Health System and Mayo Clinic. From original diagnosis to the multitude of surgeries, both targeted at the cancer to complications, the physicians and medical staff across these three facilities and operations have demonstrated why the Livability in our community is so enticing. Read More