All right, well, good afternoon, everyone, or I guess good morning, depending on where you are in the universe here. Welcome to today's webinar on the COVID-19 Relief Package. Our speakers today are Beth Swanson, Mark Johnson, and Clinton Baker from Keiko Isom, as well as myself, Daniel Fisher, AD's Vice President of Government Affairs. For those of you who are here live with us, you may submit questions during the webinar via the Q&A tab at the bottom of the screen. The slide deck from today's presentation will be shared with all attendees after the webinar. This webinar will also be recorded so that you may watch or re-watch on demand at your convenience. So with that, I'm going to give a brief introduction before turning it over to Mark, Clinton, and Beth about some of the infrastructure funding that was in this year-end bill that the President signed into law on December 27th after being passed by Congress on December 22nd, just to kind of give an overview there, and then our friends here from Keiko Isom will dig into the tax and the PPP issues for us here. So along with the COVID relief package, there was tied to it an omnibus appropriations bill that basically funds the government until September 30th of 2021. In there, there was a lot of infrastructure money. HTF, the Highway Trust Fund funding, remains flat at the FAST Act level of $46.4 billion. So obviously, we prefer increases. I'll get to kind of what the—there was an increase that happened in the COVID relief package. But as far as appropriations bills, it was funded at the FAST Act level, which is always a good thing. An additional $2 billion are coming from the General Fund to fund bridge rehab and construction and other highway programs, such as Appalachian Highways, National Scenic Byways, Puerto Rico Federal Lands. The Airport Improvement Program was funded at $3.35 billion. The Water Resources Development Act, which funds Army Corps projects such as dams, levees, coastal restoration, received a record amount of funding at $7.8 billion. The Clean Water State Revolving Fund and the Drinking Water Revolving Fund, which are the main federal grant programs for water infrastructure, received flat funding at $1.64 billion and $1.13 billion. And Rural Redevelopment Programs, about $3.9 billion went out for that, and that includes rural roads as well as broadband and other rural infrastructure components there. So the point being here, there's a lot of money out there that's flowing out there for different infrastructure programs from the Omnibus Appropriations Bill. So there's a lot of market opportunity there, and it provides at least some certainty for those programs going on, at least until September 30th. And then the COVID relief package had $10 billion, which went out to state DOTs. Now, this is a big deal that goes directly to state DOTs to fund projects and other priorities within the Department of Transportation. AED really led the effort or helped lead the effort on this, along with other industry groups. I won't get into too many details on exactly what AED did, but I would say stand by and read a future edition of CED, CED Magazine, where I'll really dig into exactly AED's role in securing that $10 billion for state DOTs, which should help ensure that projects continue well into next year across the country. So with that, in addition to the COVID, in addition to the state DOT money, AED was active on lobbying on some of these tax issues that the CACO folks will go over, as well as PPP. So basically since COVID hit, we've been very active on the Hill advocating for these beneficial programs and provisions. And with that, I'll turn it over to my friends at CACO. What is this, our sixth or seventh webinar here, or maybe an eighth or seventh at this point? Yeah. And just like with COVID, everybody thought the calendar for 2021, and we'd stopped talking about it. And here we are, and we're still talking about it, and probably we'll be talking about it for quite a while. So we were joking earlier as we were putting this together that we were getting the old band back together to talk about PPP once again. So anyway, thanks for joining us. As a reminder, CACO Ice, and we've got dealerships as clients, and that's what Clinton and I specifically work on, both on the construction side and the farm equipment side. So we've got the experience there on the equipment dealers. Beth is an attorney with our firm that has a lot of the tax, the deep tax knowledge about this. So technically speaking, Beth knows way more about any of these we're going to talk about today. Clinton and I bring a little bit of applicable, how does it apply to the people specifically on this phone? So we'll kind of play off of each other to try to get you pertinent information today. And specifically, we're going to talk about these four bullet points, what was updated specifically with PPP. Like Daniel said, there was a few tax updates that are important for you to know. For some of the people on the call, they might have an opportunity to participate in PPP part two, as well as some ERTC expansion. So we'll go through some of those as applicable. You know, certainly the biggest news for dealerships, there was, there's something we've been waiting on since this bill passed, and that is, when Congress originally passed the bill, they said that the money you got that was ultimately going to be forgiven would not be taxable income. And they never wavered from that. But shortly into everyone getting the money, put deposit in their bank account, making the commitments to participate in the program, the IRS then came out and said, well, hold on. The income, that's fine. That's not taxable. But we think the expenses then are going to be non-deductible, which essentially would have made PPP ultimately taxable. And so we've been watching this all year. And Daniel and people like Daniel kept telling us, yeah, it's going to get passed, it's going to get passed. And we kept saying, oh, my gosh, it's been another month, it hasn't been passed. They passed a cleanup bill over there, and they didn't fix it then, they passed another appropriations bill over there, fixed it then, and we were getting really nervous about it. But we had some amount of faith in Daniel, and ultimately, he was right. And Congress did the right thing. And in the last few hours of 2020, we did get clarity that certainly the PPP will have no taxable impact on anybody's tax returns. So I'll just use an example, you got a $2 million, I'm going to use a different example. You got a $1.8 million PPP loan, just under $2 million. We know for sure that it will not be taxable. It should be forgiven if you've got the appropriate, and it is forgiven, that those deductions will continue to be deductible. So you will have essentially $1.8 million of funds that were available to you that you appropriately use to pay your employees and keep them fully employed and all that kind of stuff. So in that regard, it will work as it was supposed to. The other thing we've been watching, though, would be the reason I made that example of $1.8 million. The SBA did come out recently, and it's got a lot of press in there amongst our group here with this loan necessity form, and they are continuing to use it. It's been officially released now instead of just, they leaked it out at first, and we hoped that the leaking it out would mean that they would get enough pushback that they wouldn't make it official, but that wasn't the case. So they are continuing to use this. So as people are filing their forgiveness documents now, they are having to fill out this loan necessity form, which goes back to, as a reminder, there was some questions that you answered when you filled out your application that said, do I need this extra funding? Is there a probability that we're going to have decreased income, and because of that, be stretched on our capital resources in order to keep our employees fully employed? And that was really all the bill said. From there, we started to hear some rumors that they were going to ask us a lot more. For instance, do we have, what do our cash balances look like now versus what they looked like a year ago? What access do we have to lines of credit? What access do we have to capital and those kinds of things that we could have weathered that storm essentially on our own without the PPP funding? That's not part of the bill, and it's officially still not part of whether or not you are eligible to get it. The FBA says they're using this loan necessity form purely as a statistical document, but I don't know why else they would need those statistics, but we'll see. We're going to take them at their word for now because maybe they were right, just like Daniel was right, that we were going to ultimately get the deductions in our favor, and let's hope that's the case. But we are telling our dealers to be very careful to fill that form out, make sure you've got some documentation out there as to why you thought your income would go down, even though most likely it did not, because I know most of our dealers, we saw very little retraction in revenue. We saw a difference in sales mix. We might have been selling more lawn and garden equipment or smaller equipment than we would have otherwise. We might have lost a little bit of rental market and things like that, but overall, we did not really see a retraction in revenue for most of our dealers. And so that'll be important then that you fill out that form as such that said there was a result that was reasonable that we thought we were going to go backwards in revenue. Hey, Mark, on that note, for those that have participated in some of our webinars earlier in the year, you'll remember at the time we gave some advice saying, if you can start a journal now, as you're here in March, April and May, documenting what are some deals you've lost that you know you were planning to get or what are some projects of your customers that got canceled that or paused, you know, delayed, that's causing you to miss out on sales and rental, it would be good to capture those now. I hope people did. I know I know our clients did. I hope other people did as well, because that's probably the type of information to your point. If you didn't have a revenue decrease, you don't that's okay, you don't have to show that you did, you just have to show you had uncertainty and that's some really good information. So if you didn't, it's not too late, go back to some of your some of your sales guys and your division managers and have them write those things down. It's a lot easier to do it now than it is to do it when if somebody asks for it later. Right. I know a lot of clients, we also coach them into even making at the at the board level making minutes that said, this is why we are applying for a PPP loan, this is why we're nervous about things might be why we delayed a distribution of we are an S corporation or partnership and those kind of things to try to line that up. Now when you start filling out the form, though, what you'll notice is your limited characters you can put in there. So while you might have kept a journal and have a lot of good stories to tell, you're not going to be able to get them all on the form. I don't know what the character limit is, but it's it's a little more than a Trump tweet. I think you can probably get I don't even know what the limit on a character for a tweet is it's 100 characters or whatever, you can get a little more than that. But you have the whole story, but it is still important to keep that story handy, because as a reminder, they can audit you for the next six years, you know, to show that whether or not you deserve to get this loan or not. The other big news for dealerships is, you know, early on process, they they changed that covered period from eight weeks to 24 weeks, and in fact, made 24 weeks the standard and said, you can elect to go back to eight weeks if you want, but we're going to have you cover 24 weeks, which really meant for dealerships, there's no way that payroll wouldn't have covered their entire PPP loan, and they applied for their PPP loan wrong. Because if you remember, right, the calculation for applying for the PPP loan was 10 weeks for the payroll. So when they went when they took this to 24 weeks, it made it very hard for payroll not to be all of that. Now, the clarification that they did make that we weren't sure they were going to do or not, is you can do whatever you want, really between eight and 24. At first, it was either 24, or you can elect to go back to eight. And now the way I understand it, Beth, correct me if I'm wrong in this, but you could you could say, hey, at 14 weeks, our payroll exhausted it. And so we're going to use a 14 week cutoff. And every calculation in between, how we cover how we calculate FTEs, how we calculate whether or not our employment went up or down, we can use that cutoff period and go from there. So that was a clarification they made. And really, I don't want anyone to drop us on the webinar, and then you should continue going. But those are the three big things, as far as most of the people on today's call will go. And those are big. And I'm sure there's some questions around those yet to come. And so feel free to ask those as we go. And we'll answer them either as we go or at the end, we are going to cover some other information as well. We got we got 16 more slides here to go. But certainly, these are the biggest one for dealerships. Mark, I do if I could just because there is another big deal that was in there. Oh, nevermind. That's a more of a tax version. I do want to make sure that you do touch on the meal, the meal deduction. Maybe that's a little yes, we are going to touch on that. Yeah. Yeah. Yep. And you're right. That is a big deal. It just wasn't a PPP big deal. Yeah. Sorry. In fact, Clinton, just give him give a preview. I think that was on your slide later. Make sure we're clear on that one now because I agree it is a big deal, particularly for your sales guys. Yeah. Yeah. I'll cover that when we get to taxes. I've got a slide on that. We've got a couple of questions that have come in here. And one of them starts to touch on this first on this first bullet point. So these next two slides I'll cover. These are some additional things you might you might be hearing in the news or you might be reading in articles and you're like, oh, I wonder how that affects my my dealership. So there is a there is a simplified forgiveness application that has come out, honestly, for most equipment dealers. It's not going to apply because it only applies to PPP loans that were one hundred and fifty thousand dollars or less. Certainly there might be some there might be some equipment dealers where we have a PPP loan of less than that, but but probably not many. Most of them were in the hundreds of thousands of dollars or the low millions, which which actually brings us to one of our questions that was posted in the chat here, Mark, opposed to you and Beth. But, you know, any experience on forgiveness applications for those over two million dollars and are any decisions being made? So so what I would say is our our advice, while you to kind of think about what you've seen so far and respond to that, our advice so far has been for most of the for businesses that have more than a two million dollar PPP loan was literally delay wait. We had a couple of clients that really pushed us really hard to file before the end of the year. We talked through why. And what it really came down to was they were they were worried about how this loan would affect their valuation because they had some equity transactions that were going to happen with buying out other partners and that sort of thing. And we said, let's deal with that. Let's deal with that separately through the normalizing of earnings process, because we were really we were really wanting to to make sure we had clarity on the on the deductibility of these expenses and any other information on the SBA's necessity for or their questionnaire form about the necessity of the loan. So so what I would say is, and again, I'll ask Mark and Beth here, my experience has been on over two million dollars for this question here. What we've said is wait and let's see what 2021 brings. We're now at 2021. So we'll start filing these pretty soon. Yeah, I think the other reason people were wanting to maybe show in 2020 and still was a valid reason is the the Financial Accounting Standards Board came out for those of you that do reviewed or audited financial statements that report under GAAP, that if there was a reasonable inclination that your loan was going to be forgiven, that that would be converted to income for book purposes, your financial statements in 2020. And so a lot of our dealers were like, gosh, if if we're going to show that income and there's any chance we're going to pay tax on it, we really want to line those two up anyway. And so they were thinking, well, let's go ahead and apply for forgiveness anyway. But Clinton's right. Most of our dealers waited till afterwards. So looking through the database of dealers we had, we did have a few that were even over two million. No one. None of our dealers. I think our smallest dealership PVP loan was about seven hundred thousand dollars. I think our biggest one was right around nine million dollars. And and obviously the nine million dollars is the last one we're going to have go. We're actually all of our stuff right now. But even the even the seven hundred thousand dollars, we haven't heard back yet. Now I know throughout our firm and some of our non dealership clients that are small, just kind of smaller businesses that had loans, you know, half a million dollars and under. There's a lot of those that have already gotten their stamp of approval that's been forgiven and they can move on. Now, Beth, I might ask you, though, because I don't remember actually when they get that stamp of approval says they can move on. That doesn't mean they're done. Right. That's six. That's six year window of potentially being audited is still open. Right. Yeah. So the statute of limitations for the audit is that is still in effect. I believe that the act actually shortens the statute of limitations to three years for payroll related data and four years for everything else. But, yeah, once you're once you've got the SBA funds and the determination that says that you've got forgiveness, you do still have that that window of time where the SBA can come back and audit. So so that brings us brings us to the next bullet point on this on this slide here has to do with the definition of payroll costs. So as Mark was saying a moment ago, whether you're using an eight week covered period, a 24 week covered period or now under the under this new law, you're allowed to to pick the point in the in the middle between eight and twenty four months that you want to use to file to apply your headcount limits and expenses. What a lot of what a lot of businesses are saying that now is just let me use the easiest thing, which is payroll. But that payroll got defined to also include the items in the parentheses here, a number of these benefits. So it's it just brought brought clarity to it. Then there's also some other expenses. Again, I honestly don't think many equipment dealers will will worry about having to use these other expenses, because I think most of them are just going to go with let me go with payroll and and maybe my benefits here that have been added to it. But if you hear these things out out there and the things you read or people talking with people, there are other expenses now that do qualify basically any business software or cloud computing service that you use, whether that's for your your your operating system, your accounting system, your ordering system, scheduling system, whatever. Pretty much all of those qualify at this point, clearly with people moving remote, they could have said, well, only incremental ones you had to add to to be able to work in this in this remote environment, digital environment as a result of code. But they didn't say that they said any of these would qualify. Also, any property damage that you had as a result here of vandalism and looting and things like that that occurred in 2020 that weren't covered by insurance. Hopefully none of no one on the phone had had that happen. I've not heard of very many equipment dealers that had a problem with that. Then this covered supplier cost, again, probably not going to be used by many people. But basically, if if you if you had if you had to pay expenses to get goods to you that were essential to your business and that were in a contract that was already in place, they're saying those qualify. There's so they go into quite a bit of detail about perishable goods, which clearly is not going to impact equipment dealers. On the next slide, then it also talks about several of these other additional expenses. This covered covered protection, worker protection expenditures. This is basically, you know, basically your PPP. I guess that's the next item is really all the all the PPE things that you bought for your employees. You can you can see they go into quite a bit of definition of what that is in terms of under one bullet point. They talk about medical grade masks, gloves, another bullet point. They talk about filtration systems and physical barriers. And I know a lot of equipment dealers have wound up and put the plexiglass up in parts counters and at the information desks and among cubicles and that sort of thing. But really anything basically PPE related personal protection equipment and and that sort of expense is going to qualify it again. And really, as you're talking about that with the payroll, you know, the one the thought I was having is, you know, where that would apply for a dealership is, let's say, at week 11, because I did have a couple of dealerships call me in late September. They were starting. They were like, gosh, when I actually did want to make some payroll changes. So like if like, say, in week 10, your payroll only covered 80 percent, but week 11, you you cut some staff. Well, then that might point them to say week 10 should be your cut off. So do all my payroll stuff through week 10. And then since I was only 80 percent, started looking to some of these other expenses to get me back up to 100 percent so that I didn't have to go to week 11 when I'm at 100 percent. But I started getting haircuts back because I made FTE changes. So that would be where, you know, that'd be the kind of the strategy or why you might need to move your move your covered period back and look to use some of the covered expenses. Right. And also these are we're adding here just the additional additional clarification of what these covered expenses are. Remember, we also had things beyond just payroll in the initial bill that passed back in March. I mean, that time if I'm going off memory now, I should have my notes in front of me. But I remember we had I think we had rental expenses back in the utility expenses back then. We had interest back then. I know I'm forgetting three or four things, but yeah, there are there are transportation expenses. It turned out to be nothing. Yeah, I wouldn't I wouldn't use that one. But the point is, like what I would tell any equipment dealer is. Like Mark said, you've got to look for the headcount, make sure you make sure you're not going to get a haircut on your headcount. And then after that, you shouldn't have any problems covering your covering your expenses there. We're such a payroll heavy industry. And at the same time, all these other expenses thrown in in our estimates that we've prepared throughout the year that we've updated as law changes have for our clients, that sort of thing. We don't have anybody who would who would not be getting 100 percent. So in this industry on the next slide, I want to switch gears now for just a second. I've only got one slide on it here, but talk about some of these updates. So I remember I don't know if this happened to Beth when she was in law school, but I know when I was in graduate school in my tax classes, one of my professors told told our our class at the time he said, never think for a moment that tax legislation is about fairness or equity or even really about raising revenue for the government. It's really about incentivizing behavior. And his example that I remember that I assume it's still to be true to this day, I've assumed it to be true for 20 some years now, is the United States is one of the few countries in the world that allows a tax deduction for your mortgage interest. That's no coincidence. We allow that. And we also have the highest percentage of personal homeownership in the world. Right. Just kind of his funny example. But really, that's what we see here on this slide here. Several things where you can you can specifically tell through this legislation that there are some behavior incentives that that that are part of this and they're doing it through tax legislation. So so the first thing here is the the family's first family, first coronavirus response act, I think is what it was called back in March, where small and medium sized businesses are able to get a dollar for dollar tax credit for for wages that they pay for people that take sick time and family medical leave as it relates to covid-19 specific to covid-19. So that's been extended through March of twenty one March, the end of March of twenty one. Don't know if it'll be extended after that or not. Certainly, you know, we continue to see numbers rise and then fall and then rise again and then fall again and rise again on this roller coaster right now. So that's something that may or may not be extended again in the future. But it is at least through this first quarter of twenty twenty one. This next item, kind of a big deal. Like Daniel said earlier, this is pretty significant to a lot of dealerships. And that is that we have 100 percent deductibility of business meals for tax purposes if the food and beverage is provided by a restaurant. And that's for twenty twenty one and twenty twenty two. And certainly you think about where else in the world would I be getting food and beverage? I suppose a grocery store. But if I'm a business, I'm probably, you know, having it catered in, brought in, maybe in some cases like where I live, you can still go to restaurants subject to some mask requirements, that sort of thing. What what's interesting about about meals and entertainment from a tax perspective for the longest time in the first 15, 20 years of my career, it was just a real quick, easy 50 percent deductibility for meals and entertainment. And they got lumped together and everybody just kind of threw them in in the same bucket on their on their general ledger and their accounting system and said that account gets knocked 50 percent. And then a couple of years ago that changed and we started having to break out, you know, entertainment versus meals provided, you know, in the normal course of business and other things. So now we have a third thing, I guess, and that is are you buying your food and beverage from a restaurant or not? And if so, it's 100 percent deductible for twenty twenty one, twenty twenty two. And clearly there are a number of reasons for this. From my perspective, it's really this is this is one of the ways they're trying to help the restaurant industry by tying that designation to restaurants. What I would be sure to note on this is it doesn't apply to entertainment expenses, not that there's a lot of opportunity for entertainment right now. I mean, in terms of entertaining clients, you know, that, you know, sporting events or or, you know, cultural events, that sort of thing. A lot of those are canceled. I suppose there's still a lot of golf since it's an outdoor activity. But I don't know that most of us have a lot of time to play too much of that nowadays. If you do good for you. The next thing here are our series of tax credits that are extended through twenty twenty five. The work opportunity tax credit. I do know of a couple of different equipment dealers that take advantage of this today. I remember work opportunity tax credit is for hiring individuals that are in certain targeted groups. And those groups are groups that have consistently faced this kind of as this way to describe it would be like a barrier to employment. So these would be a couple of equipment dealers I can think of, you know, have program to hire qualified veterans. That's a one that I think is probably used more than some of these others, but some of the others also include like designated community residents, you know, if you're hiring people of a certain age that are in empowerment zones and enterprise zones, then this rolls up into this work opportunity tax credit. So like SNAP and supplemental security income, recipients as well qualify for that. Again, I don't, I haven't run into that too much with equipment dealers. So that's extended through 2025. A couple of these others are also extended. So the new markets tax credit, not one I've run into with equipment dealers, but this is basically a program that's designed to help private equity or private capital, not private equity, sorry, private investments into low income communities. You get a tax credit for part of that. If you go through these, they call them CBEs, not a term I was familiar with before this, but there's these community development entities. And so that's extended. If that's something that you, you and your dealership are taking advantage of, just know that it got extended from 2025 and they're allowing the carry forwards of those credits for even five years after that. So really for the next decade, you'd have an opportunity to continue to use that new market tax credit. And then, and then finally the, this credit for paid FMLA, I think sometimes people get this one confused with the, the first bullet point on the slide, the, the, the, the, the family's first coronavirus relief act. It really is technically something different because the, the credit for, for payments under FMLA is actually a internal road revenue code section 45 capital S, which came about in I think 2017. And it's, it's not, it's not limited just to COVID-19. It's actually, if you pay wages for people that are taking FMLA, then you have the opportunity to get a tax credit back for a percentage of that. So that's extended through 2025. My guess is right now, most of us on the phone are like, I better make sure my HR department knows about that. And they're the experts in it. So those were our, those were kind of the big tax highlights, if you will, again, incentivizing some behavior here, employing, you know, certain groups of people also spending money clearly at restaurants. And so Beth, we're about halfway through our time here. So hopefully we've saved enough time, because I know, I know the big topic here is what about PPP? PPP 2.0 is what I call it. I don't know what other people call it. But you know, this is really an opportunity for businesses, some businesses to take a second swing at getting more PPP money. For everybody on the call, and I don't want to, I don't want to steal Beth's thunder, but I'm going to kind of jump in here for a second. You know, one of the big hurdles that I think for a lot of equipment dealers that are on the phone with us today is to get PPP 2.0. And I know you'll get to it later on, but my understanding is you have to have a 20, you have to be able to demonstrate a 25% reduction in gross revenue in a quarter. Now it could be the first quarter of 2020, second quarter of 2020, third quarter of 2020, or fourth quarter of 2020, compared to the prior year, but in one of the, at least one of those quarters, you have to show a 25% decrease. Like Mark said earlier, it's, it's, it's been a surprisingly good year for the equipment dealers that we work with, whose financial information we see on a, on a regular basis. Many of them have done much better than expected. The ones that had even a higher percentage of rental than the others probably got beat up a little bit more. Although even many of them did really well. So I don't want to steal your thunder, Beth, but I'm going to say for a lot of people, you know, you didn't have a 25% decrease in these next several slides, while interesting are probably may or may not be, may or may not be applicable is what I would say. So with that great setup there, Beth, I would like for you though, to walk us through it because it is something that again, if for nothing else, more than people saying people getting clarity of whether it applies to them, I think it's a pretty critical. Yeah, definitely. Thanks Clinton. Before I do dig into the second draw loans on the PPP, there's a question in the Q and A that I thought we would just cover real quick. The question is whether the FMLA tax credit through 2025 is only applicable for COVID related FMLA. And Clinton, you had just covered this. This credit is actually the credit from the original Tax Cuts and Jobs Act of 2017. And it's the credit for paid leave that you pay under regular FMLA. So that provision was originally sunset on December 31st of 2020, now is extended for any FMLA leave that you pay for your employees through the end of 2025. With the second draw loans, this slide covers the outline of the information that we'll cover. Like Clinton had mentioned, tampering expectations is probably a good idea. We'll go through the list of eligible borrowers, qualifications, the loan amount calculation, corporate expenses, the forgiveness process, and any other updates that we do have. So we'll start with eligible borrowers, which probably won't affect anybody on this call. But for eligibility for the second round, Congress expanded eligibility to news organizations, local broadcast stations, 501c6 nonprofit organizations, and does not include businesses that receive a shuttered venue operator grant. Something of note on the 501c6s is that the CARES Act originally did not include 501c6s. It was really limited to 501c3 nonprofits. So a pretty big expansion that will cover a lot of nonprofit organizations. The main caveat with that expansion is that you can't use your PPP funds on lobbying expenditures, which seems to make sense. Additionally, you have to have been in business on February 15th, 2020, in order to be eligible. If you are such a new business that you are not in business on February 15th of 2020, you do not qualify for the PPP loan. Hey, Mark, just a question. Did you advance the slides on your screen? I'm on second draw opportunity. Eligible borrowers at the top, is that what you're seeing? Yeah. Is that where she's at anymore? Nope. I'm sorry. That's all right. Well, actually, we're actually ready for slide 10. There you go. Thanks, babe. Do you want me to switch it to slide 10? Yes, please. Yep. Let's go to the next one. I wasn't sleeping, I promise. Thank you. So in addition to this new sort of business type borrowers that are eligible, there is restricted eligibility for borrowers that are of an eligible business class. So for starters, Congress has limited eligibility to having fewer than 300 employees. In the CARES Act, there was a provision that said that if you qualified under the SBA's alternative size standard for your industry class, you could have more than the 500 employees in the first round. The new law does not contain that provision, so it's really actually limited to 300 employees with one exception that we'll get to on, I believe, the next slide. Additionally, you have to have a 25% reduction in your gross receipts in any one quarter of 2020 compared to your financial results from 2019. One of the biggest things that we still don't know yet is really how the SBA is going to evaluate what gross receipts means. We are hearing that there will be guidance sometime in the next 24 hours, and that it will be voluminous, so we probably will have some answers on that by the end of the week. We hope anyway. Is there, just for clarification, let's say in 2020 an equipment dealer, they didn't have a decrease then, but as they go throughout 2021, let's say second quarter 2021, they would have a significant decrease, more than 25%. Are they just out of luck? Are these measurement dates pretty hard and fast that it was 2020, or could they get it if it happens in 2021? The only quarters that are referenced in the law are the quarters in 2020, and really, technically, although we're in 2021 already, fourth quarter of 2020 was only added if you apply for the second round PPP loan after January 1st of 2021. So yeah, it's really only those four quarters in 2020, rather than looking at results in 2021. Got it. So they would know, businesses will know now whether they qualify for this or not. Exactly. For loans under $150,000, to go along with the simplified forgiveness process that Clinton talked about, there's a simplified application process for the smaller borrowers, which is basically that you don't have to certify right away that you meet the revenue loss requirement. You just have to submit that certification on or before you apply for forgiveness. For loans over $150,000, it's yet another of our unknowns, but likely you'll have to submit certification and substantiation of your revenue loss at the time of the loan application. Again, we hope to have more answers on that within the next 24 hours. On the next slide, we've got additional information about the loan amount calculation. So, and actually, I think before we talked about that, I was mistaken about that eligibility addition that I want to talk about. So for the only exception to having 300 or fewer employees is if you have more than one location, you can have up to 500 employees. So there's just one small exception, and it really doesn't expand beyond the original CARES Act PPP eligibility, but if you have multiple locations, you can have up to 500 employees and be eligible for the PPP loan around two, rather than being limited to 300. So payroll cost, or the loan amount calculation is still based on historical payroll costs and is the lesser of two and a half times your average monthly payroll costs for either the one-year period before the date that you make the application or the calendar year 2019. And the maximum loan amount for this round is $2 million. Additionally, there's some new modified calculations for new businesses. It's still going to be two and a half times your average monthly payroll costs, but there's a new way to calculate what your average monthly payroll cost is. Same with seasonal employers, and what seasonal employer means is that you are effectively or actually only in business for six months or less during the year. Farmers and ranchers also now have a modified calculation, so instead of looking at your net income for 2019, you'll look at gross receipts. That'll dramatically increase the amount of PPP loans that farmers and ranchers are eligible for. And just an interesting note, probably doesn't affect anybody on this call. So for the covered expenses on the next slide, it's really everything that we talked about in the first round of PPP, as well as all of the new additions that Clinton talked about for the first round. So we've got our payroll costs, which include cash compensation, bonuses, health insurance costs, including vision and dental and life insurance and accidental death and dismemberment, all of those health and health-related insurances, utility payments, rent obligations, mortgage interest, those operating expenditures, that management information system costs that Clinton talked about, property damage, supplier costs, and worker protection are all eligible costs. So everything that was eligible under round one is going to be eligible under round two. But Beth, the covered time period, entire year, right? For all of those or just for the payroll? The covered period is still going to be between eight and 24 weeks. Okay. I thought I saw on your slide earlier that it could be the whole year. I was like, wow. So even a small company could get to the $2 million pretty quick. Gotcha. No, the average monthly payroll cost is calculated over a year unless you're a seasonal business. Okay. On the forgiveness process, like Clinton had mentioned, there's practically automatic forgiveness for loans that are $150,000 or less. For greater than $150,000, we're expecting that that forgiveness process is going to look more or less like the current forgiveness process. There's not a lot of detail in the law, so we are going to need the SBA to fill in some details. But we would expect that we will have the easy and the long form depending on whether the borrower has reductions in FTEs or salaries and wages in the second round as well. Like with the first round, payroll costs do still have to be at least 60% of the loan amount in order to qualify for full forgiveness. And we do still have that reduction in forgiveness if you have FTE reductions or salary and wage reductions for your employees who make less than $100,000 a year if their wage reduction is more than 25% of their pre-COVID wages. The next slide has some additional information. This first bullet point actually does affect all loans, all PPP loans. The EIDL loan advance will no longer affect your forgiveness. So under the previous process, the SBA has said that they'll reduce the forgiveness by the amount of your EIDL loan that you'd received. The law changes that and also instructs the SBA to go back and issue regulations to make sure that all borrowers, even if they'd already received forgiveness, get the benefit of that treatment. So if you had your PPP forgiveness reduced by an EIDL advance already, the SBA has been instructed to go back and give you that $10,000 of forgiveness back. They didn't give any indication whether that would just be an automatic, like they know who you are, they're going to send you a check, they're going to forgive the $10,000, or will they have to go through another process to get that? There isn't a clear indication from SBA, but the way that we read the act is that the SBA has been instructed to make it automatic. Because the EIDL is administered by the SBA directly, they do know who those borrowers are, so they should be able to go back and refund those amounts as needed. That was one of the questions in our chat there, so I'm glad you had that in there. Perfect. The next bullet point is a little bit unclear. What this means is that you can apply for your second PPP loan before your first loan is forgiven. You don't have to wait to file your forgiveness application before you can apply for your second round. And then, like with all of the other PPP loans, your expenses are still deductible, no change on that front. They're not going to have to do another... I don't know if this is a Daniel question or a Beth question, but when I think of the first round of PPP, the banks got out in front of that pretty quick, because they were wanting to make sure they got their customers signed up for a PPP loan. As time went on, it felt like the banks got a little weary of the process and the amount of capital that they had committed to it. So that, combined with the fact that the second round is $185 billion instead of several... I don't even remember what the first round was, $700 billion or so. Is there a thought that, one, they really want this to go mainly to the $150,000 loans and, two, will it go fast? As far as if there's somebody on the phone that could qualify for this, is this a, we need to get on this right away kind of thing, versus it's going to be around for two or three months like the last one before we run out of time to do it? That's a really good question. Daniel, I don't know if you have any additional information, but I do know that there are funds that are dedicated to smaller banks and, I believe, smaller borrowers. So at the very least, there is some protection for smaller borrowers there. I have been hearing, I'm getting daily emails from our forgiveness software provider that says, hey, by the way, don't forget that you can sign up, enter your information early so that you can submit your second round application as soon as it opens. So I'm definitely seeing a lot of pressure to apply or to prepare to apply early, but I'm not sure about how fast the funds really are going to go. Got it. You know, one of the other programs we have before we get into ERTC here, one of the other programs that I knew we had done at least one webinar with AED, maybe a couple of them on, had to do with Main Street Lending Program. That was a program that was probably failed from the start due to the fact it really wasn't any better than market rate lending, basically. But it was interesting, Mark, to your question about the funding of it. I saw some chatter right before the holidays, which is old news now, but I heard some chatter a few weeks ago about this $500 billion that was sitting out there for Main Street Lending that nobody ever went and got because it didn't make sense. So we're going to use that to fund the next round of stimulus that we want. And again, I don't think it was anything official, but it's kind of interesting how all of a sudden we're talking about, well, we've got $500 billion unused dollars. What do we do with that money? So this last section here in these last five to ten minutes, probably the last five minutes, and then we can leave a few minutes at the end for any more questions. I think we've answered the ones that have come in so far. It has to do with the Employee Retention Tax Credit, the ERTC. And this was a tax credit. For industries that got shut down or had significant revenue reductions. If I think about hospitality and restaurants and other things. It's a tax credit. and anything entertainment, any entertainment venue. This, the Employee Retention Tax Credit was really designed to say, hey, this was back in March, you know. If you keep paying your people, even though you might be shut down and they're furloughed, but if you keep paying them, we're going to, up to a certain level, give you a tax credit. And honestly, again, for equipment dealers, many of them were in states that they were not shut down. They were deemed essential businesses. They could be open even if it meant they had to go to concierge, curbside service, and things like that. But Beth, can you give us a quick overview of that program? And then what did kind of change, just in case, you know, there might be somebody on the phone who may have been in a place that they had to shut down? Absolutely. I'll try and take this at a high level so that we do still have time for questions. So as Clinton had mentioned, and Mark, we're on the next slide, please. If you're an eligible business, you can claim a credit for 50% of the qualified wages that you pay to employees, up to $10,000 of wages annually per employee in 2020. So a maximum of a $5,000 credit per employee. And the credit is claimed on your 941s. You are eligible, as Clinton mentioned, if your operations were partially or fully suspended due to a government order, or if your revenue is decreased by at least 50% in any single quarter in 2020 compared to the same quarter in 2019. For qualified wages, what that means is if you've got under 100 employees, all of the wages that are paid during the time that you're eligible are qualified wages. And if you're a large employer, it's only wages that you pay to employees to not work. So any wages that you pay to furloughed employees. Originally, PPP borrowers couldn't receive the ERTC. So this was a limited application for most people because most people rightfully decided that the PPP gave them a better benefit than their retention credit would. The new law changes this. So PPP borrowers may receive the ERTC, but you can't double dip. So you can't claim your payroll costs for both the ERTC and the PPP forgiveness. This is effective retroactive to the passage of the CARES Act. So if you are eligible for the ERTC, you get to claim your credits for the full 2020 as if the eligibility restriction were never in place. One saving grace that Congress did throw us on this one is that instead of going back and amending all of your 941s for the year, you can claim your full 2020 credit on your fourth quarter 941. So a little bit of a help there rather than having to amend two or three quarters for that credit. There's also some expanded eligibility for 2021. So for the first two quarters of 2021, you can claim the retention credit if you have decreased receipts of 20% quarter over quarter rather than 50%. So a good rule of thumb is if you're eligible for PPP round two, you're gonna be eligible for the retention credit as well. And comparing the decrease in revenues, there's a safe harbor allowing you to use the prior quarter gross receipts in addition to the same quarter in the prior year. Also the large employer definition increases from 100 employees to 500 employees. So if you have fewer than 500 employees, all wages that you pay during the first two quarters of 2021, assuming that you're eligible would be eligible for the credit. Additionally, the credit increases to 75% or 70% of the qualifying wages up to $10,000 in wages per employee per quarter. So increased credit amount as well. So essentially it doubles for 2021. This, if you're doing fine in your business and you're not eligible for either the PPP or the new ERTC, it may be of limited applicability, but there's still that opportunity, especially as we go over the next six months uncertain about changes in shutdown orders and increased numbers or declines in positivity rates. There's just, there's a lot of uncertainty. So a good thing to keep in mind. So Beth, can I ask a clarifying question on this one for 2021? So this 20%, the threshold going from 50 down to 20, for 2021 though, now we're looking at, do we have the decrease in revenue in 2021, not 2020, right? So- Right. Okay, so we could be eligible for this. So if an equipment dealer, let's say, let's say things continue to be shut down and quarter two of 2021 is not good. So April, May, June of 2021 is not good for them. And they do have a 20% decrease. While they may not be eligible for PPP, they could be eligible for this. And that's up to a 500 employee limit now, is that right? That's right. Wow, okay. So, and that's a credit of 70% of wages up to $10,000 per employee per quarter. Right. All right, so I'll be honest with you. I didn't spend a lot of time looking at this, but I just learned something. So that actually does get me kind of excited about, potentially for equipment dealers, that this could be something to keep an eye on. Yeah, Clint and I, early on, it was clear, it was either PPP or ERTC, and PPP made a lot more sense there. We're paying attention to some of the ERTC stuff, so. Yeah, that's the way I was. I was like, why would you ever do that? You go get your PPP money, it's free money. Wow, okay. Excellent. And another benefit, just to clarify, cause I was expecting you to clarify something completely different. When we're looking at the declining gross receipts, we're comparing our 2021 results to 2019 and not to 2020. So it will have to be a decline compared to fully pre-COVID levels, but there's still expanded eligibility because that 20% reduction is a fairly low threshold for many industries at the very least. Sure, yep, yep. Well, and 2019 was a pretty good year for a lot of equipment dealers. We do have one- There's a question here that you'll get to here in a second on payroll tax deferral. And before you answer that, I also, just cause there's probably a lot of people that get the ERTC and the payroll tax deferral even mixed up a little bit. Nothing changed with the payroll tax deferral though, right? I mean, 1231.20 hit and that baby was over, correct? That's right. So for the employer side payroll tax deferral, nothing has changed. If you've deferred the employer side of social security taxes, you pay half of that deferral by 1231 of 21 and the other half by 1231 of 2022. The law did change as it relates to the employee tax deferral. Instead of repaying the employee's portion over the first four months of 2021, employees now have the whole calendar year to make that repayment. So now that we have that expanded repayment period, probably some of us wish we could go back in time and make that deferral election instead, but there was just no way of knowing. And the room was not given versus turned out to be only room or that, or yeah, there's still room. I haven't, yeah, I haven't seen anything to indicate that there's gonna be forgiveness of that. There's certainly not in this bill. There may be something coming in a future stimulus bill. Got it. All right. Well, I wanna thank everybody here for joining us and Daniel, I'll turn it back over to you. I know you're on our stories from the road list and probably many of the people are, but if you're not, then there's a place you can go on our website here and subscribe. This is a video series Mark and I do. We haven't been able to travel as much this year. So we did shoot a couple of them here though in the last few weeks. It'll be getting out pretty soon again. Yeah, well, no, thank you guys. Very informative. And for those who are joining and need to rewatch it, the webinar will be available afterwards to rewatch and rewatch. And so thank you again to Keiko Isom. It's been a great partnership with you guys. I know I ended up talking to Mark on New Year's Eve. He was probably starting to pop open the champagne, but it's been, I've relied on you guys a great deal in terms of making sure I understand what's going on. And it's been great to have you and appreciate all the time in educating me as well as our members. Thank you. With that, thank you everyone. I hope everyone has a great day.

COVID-19 Relief Package

infrastructure funding

Highway Trust Fund

bridge rehabilitation

Appalachian Highways

Airport Improvement Program

Water Resources Development Act

Paycheck Protection Program

Employee Retention Tax Credit