CRYO'S RESCUE PACKAGE - COVID 19
LIVE BLOG - UPDATED FRIDAY, APRIL 9th AT 11:25 AM PST
Many cryotherapy business owners are terrified about losing everything due to the COVID-19 pandemic. Most small businesses operate on a small margin and often a single month of being out of business can be fatal. We understand that you are afraid and we are maintaining this blog to provide all small businesses with up to date information on how you can avoid closing forever. This blog will be reviewed daily and any new developments within the local, state, and federal governments will be added with links to resources. Starting your business was not easy but you fought for it. The temptation to give up is real, but now it is time to fight like never before. This may very well be your golden hour.
HOW TO PREPARE FOR BUSINESS NOW - Update April 6th, 2020
Business is slow worldwide. Purchasing of equipment and services has come to a near standstill and cryotherapy is experiencing the squeeze from both sides. But in the downtime there are unique ways you can prepare for when your doors open again and customer traffic is back to normal. Some businesses will fail and others will thrive. The difference is often in how they use the experience of slow months.
Stay Relevant on Social Media. The one thing people have a lot of right now is time to use social media. Successful companies post on social media everyday and offer contests, trivia, and games for keeping their viewers engaged. If social media is not your strong point this is an excellent opportunity for studying how to develop a social media presence.
Learn more about cryotherapy by clicking this link to Cryo Innovation’s listing of clinical studies. Many people will be asking questions about how cryotherapy can help. It will help you as an owner to know which studies have shown what benefits and how to communicate that to your clients.
Prepare for traffic! Many people have gained weight during the slowdown and will be returning to gyms en masse. This is an opportunity for marketing to your email list how cryotherapy can help avoid overuse injury. Unfortunately many people will return to exercise with a bit of desperation to prepare for summer. That can lead to overwork, delayed onset muscle soreness, and injury. Use your contacts to sell cryo packages for gym members and call on local gyms to develop discounts that benefit both businesses.
Posture for takeover. If businesses learned anything from the 2008 recession it is that the strong survive and are rewarded. Your competitor may go out of business. You can absorb their contacts, purchase their equipment at a discount or auction, and expand your reach beyond your current clientele. Lessons in volume from 2008 showed that businesses that survived lived on to thrive in the new market. This will be even bigger.
Get Creative. Now is the time to rework logos, websites, uniforms, and anything else that you have never found the time to do. Returning to the regular-working world with a fresh look and logo may help more than ever before.
HOW TO APPLY FOR THE PAYCHECK LOAN - Update April 3rd, 2020
The Treasury has authorized $349 billion in forgivable loans so that you can send paychecks to your furloughed employees. The loan terms are at 1% fixed rate. You will not have to start paying this loan back for 6 months. The legislative intent of this act is for you to pay your employees. Here are some key points:
You can have this loan forgiven if you maintain your staffing and pay rates at pre-disaster levels for 8 weeks.
You can also use this money for non-payroll costs such as mortgage interest, rent, and utilities; HOWEVER, the Treasury expects you to use 75% for paying your employees.
You have until June 30th, 2020 to apply. Don’t wait too long.
You can request a loan to cover each employee and associated payroll costs for up to $100,000 per employee. Most cryo staff are not making $100k per year, but if you are as the owner or sole-proprietor then you can apply to pay yourself up to $100,000 if you were making that much before the disaster. Don’t give yourself a raise to take advantage of the loan.
No collateral is needed as the loan is guaranteed by the Federal government.
Many cryotherapy businesses sought out a small business loan to get started. This is no different and has much better terms. Take advantage of this now and you can pay your employees and stay in business.
Click here for a PDF version of the Treasury’s instructions to receive this loan.
Click here for the online application from the Treasury.
HOW TO APPLY FOR THE FEDERAL DISASTER LOAN - Update April 1.
Here’s some good news: it’s all online and fairly straightforward. To make things easier for you it will help to have the following information ready.
Your EIN number or SSN for Sole Proprietorship.
Gross revenue and Cost of Good Sold for the past 12 months from January 2020.
A brief description of all compensation sources.
The date the business started and the date you became owner (often the same date unless you bough the company).
Number of employees (W2’s, not 1099’s).
Information about each owner, including SSN, place of birth, ownership percentage, and their home address.
Your business bank account and routing numbers for direct deposit.
Once you fill that out you will see a large check-box to be considered for an advance of $10,000. If you receive the advance you can use it immediately for your business needs. If your loan application is denied you can keep the $10,000 as a grant. If your loan is approved the funds will be deposited in your account. The interest rate is a fixed 3.75%. You have 12 months to start making payments. The application is smooth and shouldn’t take you more than 20 minutes.
If you lost your staff or they have given notice that they are not returning then you have until June 30th, 2020 to rehire the same number of people and pay them at the same rate to qualify for loan forgiveness.
SMALL BUSINESS LOANS - Update March 31st, 2020
The federal stimulus has two options for Cryotherapy businesses. Which one should you choose? Below is a breakdown to help you make sense of it all.
SBA 7A Program “Paycheck Protection Loan” - Up to 10 Million
You must apply for this before June 30th, 2020, have less than 500 employees, and use this money to pay your employees and keep your business afloat. This loan is given by your local bank that is already set up for 7A type loans. This loan is potentially the best in the long run and if you use the money for payroll expenses a large portion of the loan can be forgiven, up to $100,000. The SBA defines “payroll expenses” liberally.
What’s Included in Payroll Expenses?
Wages, commissions, salary, or similar compensation to an employee,
Compensation of a sole proprietor or independent contractor that is self employment income,
Payment of a cash tip or equivalent,
Payment for vacation, parental, family, medical or sick leave,
Allowance for dismissal or separation,
Payment for group health care benefits, including premiums,
Payment of any retirement benefits, and
Payment of state or local tax assessed on the compensation of employees.
What’s NOT Included in Payroll Expenses?
The compensation of any individual employee in excess of an annual salary of $100,000,
Payroll taxes,
Any compensation of an employee whose principal place of residence is outside the U.S., or
Any qualified sick leave or family medical leave for which a credit is allowed under the new Coronavirus Relief Act passed last week.
What Else Can I Use The Money For?
Mortgage, Lease, or Utility expenses, and any other Debt service requirements.
Economic Injury Disaster Loan - Up to 2 Million
This is a disaster loan and you have until December 31st, 2020, to apply for it. No banks are involved and the loan is issued directly by the SBA. This loan can also issue out $10,000 in 3 days as an Emergency Loan. This loan may be best if you do not have employees. It will be faster to obtain and has a longer repayment period with a better rate.
You can use Disaster Loan money for:
Paying fixed debts.
Payroll and accounts payable.
Other bills that could have been paid if the disaster had not occurred.
What do I need to apply?
Loans over $25,000 require collateral.
SBA takes real estate as collateral when it is available.
SBA will not decline a loan for lack of collateral but requires borrowers to pledge what is available.
The free electronic application can be found through the SBA’s Disaster Assistance Program at sba.gov.
Special waivers for this loan:
The SBA is waiving the rules related to personal guarantees on advances and loans of $200,000 or less for all applicants.
The SBA waives the “1 year in business prior to the disaster” requirement (except the business must have been in operation on January 31, 2020).
Waives the requirement that an applicant be unable to find credit elsewhere; and
Allows lenders to approve applicants based solely on credit scores (no tax return submission required) or “alternative appropriate methods to determine an applicant’s ability to repay.”
Cleaning Advice and COVID-19 - Update March 30th, 2020
This is a virus, not a bacteria, so “antibacterial” cleaning solutions are not guaranteed to help. The best way to destroy COVID-19 is to clean with something that cuts through its outer protein-based coating. Soap does this well, but you must scrub well to get the soap everywhere on your hands. Hot water assists this by making more soapy foam that distributes well, and the heat itself distresses the virus. Soap is the #1 method for cleaning your hands and dishes. Other cleaning practices are helpful:
Alcohol rub gel: use a gel that has a minimum of 65% alcohol content when soap is not available. Rub it well into your fingertips and all over your hands.
If you use bleach to clean your house do not mix it with anything except water. Use 1 part bleach to 5 parts water. Always test this solution in an inconspicuous area to make sure it doesn’t damage any color or surfaces. After you wipe something down (such as a table or doorknob) let it air dry.
Try to avoid shaking out sheets or other linens, including clothes. The virus may have landed on the clothes and by shaking them it can become airborne. It is best to let the virus die on the surface of the clothing, which it will within 3-4 hours. If you are concerned you can always toss your clothes in the washer.
Keep your nails trimmed. The virus can hide under your fingernails, which then may touch your face. If you do need to touch your face make sure to wash your fingernails vigorously beforehand.
Vinegar solutions do not kill the virus because vinegar does not disrupt its outer protein coating.
Do not dust with a feather duster as this can make the virus airborne. Instead wipe down surfaces with a cleanser, Clorox-type wipes, or a bleach solution.
According to Harvard University and John’s Hopkin’s University the virus can live on surfaces for a long time, from 3 hours on porous materials to 72 hours on plastic or glass. Click here to access Harvard’s Coronavirus Resource Center.
Relief Available Now - Tax Day is July 15th, 2020
Each and every cryotherapy business can benefit from the following programs:
The IRS has extended the due date to file and pay income tax to July 15, 2020 without penalty or interest. This applies to everyone. You do not need to do anything as it is granted to all Americans across the board, individual, small business, and corporation alike.
This leaves you with a 90 days to use the money you have now to stay afloat, pay your bills, and pay your employees.
If you are expecting to receive a refund you should still file by April 15th or as soon as possible. Most refunds are paid out within 21 days. Please read the statement from the IRS by following this link here.
If you need an extension beyond July 15th you can request it. Individuals must file Form 4868 and businesses must file Form 7004.
Loans That Can Be Forgiven
Loans are usually provided with interest attached. The government is now offering small businesses loans with zero interest and the flexibility to be totally forgiven in certain circumstances (that means you don’t have to pay it back!). Here are the details that we have discovered so far:
You can apply for a disaster loan through the Small Business Administration. These are guaranteed by the stimulus bill’s cash infusion so you are not likely to be denied. You do not have to provide collateral or a guarantee. Follow this link to determine if your state qualifies and apply online.
You can receive $10,000 in 3 days in the form of an emergency loan.
Your loan amount will be primarily based upon your payroll and immediate needs to stay in business. And the entire amount can be forgiven if owners maintain their workforce for at least 8 weeks. This is an unheard of opportunity. If you cannot keep your workforce at current levels your benefit will be reduced proportionally.
This is NOT signed into law as of this morning Friday, March 27th, 2020. Here is a draft copy of the details and numbers from the bill. This is subject to change.
Courtesy US Sentate and Business Insider
Stimulus Payment Checks
You can check the real-time status of the checks here. This chart shows how much you can receive based upon your past earnings. From our current understanding each individual earning less than $75,000 will receive $1,200, and each married couple $2,400, plus an additional $500 per child, subject to qualifications.
No Evictions . . . Yet
The stimulus bill will protect you from being evicted by not paying your rent. Here’s the breakdown:
Pay your rent if you can.
Check with your local government (state, county, municipality, etc.) to see if a moratorium or ban has been put in place to stop evictions. This will help you stay in place but you will eventually have to pay for any months you do not pay.
If your landlord uses a service then contact them first. The servicer is usually the company that sends you the bill for your rent.
Call your landlord if possible and ask if he or she has received any guidance.
Many states have banned evictions, such as California where Cryo Innovations is located. Check with your local government.
Paid Sick Leave for Your Staff
The Federal government has approved paid sick leave for your employees for up to 2 weeks for most, and 10 weeks for those with children. Be careful to follow the rules with this as the paid sick leave is an entitlement, not a choice. You must also post the rules in a conspicuous place in plain view to all employees. Here is the link to the PDF in English. Follow the link here to read the exact rules and directions. Disgruntled employees can file anonymous complaints if you do not grant them their sick pay and that can bring your business under investigation by the Department of Labor. It will also help to familiarize yourself with the exact rules so that you are not taken advantage of by employees who abuse this system.
Where will you get the money to actually pay them? You will be reimbursed 100% by the IRS either through a payroll tax credit or an actual payment. Read the actual rules and instructions from the Treasury here.
What if I simply don’t have the money to pay them? You have until April 17th to come into compliance, but the government will help you! You can withdraw funds from your Federal payroll tax deposits or, and if that is not enough, you can receive a refund of the credit amount from the IRS to cover the required wages. Here is an explanation and a link to how this works.
Be honest with your staff. Tell them that this is new to you and you are figuring it out. They are just as scared as you are so make sure to acknowledge that. Emphasize that you understand that they need money and that you will provide quickly it once you know you are doing it correctly. Being completely forthright and honest with them about what you are doing will help you keep your own sanity and protect you from angry complaints.
Ask for Help
Don’t be afraid to ask for help. Everyone is in this together and nobody will look down on you if you ask us a “dumb” question. We want to help and we will stand by your side.
NOTICE: Cryo Innovations is not a tax professional. The information contained herein is for informational purposes only. For any and all tax information consult your tax professional or the IRS.