With everything going on with the second round of Paycheck Protection Program (PPP), I wanted to cover the 3 basic tips you need to know before submitting your application.
In our business, we are always pushing the importance of building and nurturing relationships. We all know the importance of building relationships with our students, their families, and our community.
On the business side, we have to be committed to building relationships with the people that can potentially help us accomplish our goals as well.
It’s imperative that you nurture specific relationships with people like your CPA, your lawyer, and in this case, your bank.
Which brings me to Tip #1 — You’ve got to establish a relationship with a smaller bank.
Many school owners experienced a painful first round of PPP where their “large” bank was unable to get them a distribution. This is why developing a relationship with a small bank is an absolute must.
They are much more personal, they are smaller, they are easier to build a relationship with, and they will go out of their way to help with what you need— including the PPP.
Putting the PPP aside, it’s just smart business to have a relationship with a smaller bank for the long term health of your academy.
If you ever need a small business loan, they will be there for you.
When you want buy your own building and need a bank’s help, they will help you.
It’s a good relationship to always foster and maintain. Another great option is building a bank relationship with a credit union. It will allow several personal opportunities that other banks just won’t do.
Some of these could be speedy application/processing with loans, fast day-to-day business transactions processing, a great resource for business contacts and referrals, an easier chance to find new business partners and clients, and overall connection with your community.
Tip #2 is to stay up to date with your business licenses and books.
It is important that you are protecting yourself by keeping your LLC or INC updated. By keeping your LLC/ INC up to date, you are notifying the state and other companies that your business is running smoothly.
Keeping your books up to date will ensure that when you need to pull data, it is ready to go.
Tip #3 - Lastly and most importantly, you have to have knowledge about what a PPP loan is in the first place and how to qualify.
Let’s start with the most important information you need: what makes you eligible to apply.
The 2nd PPP loan is worth up to $2 million provided you have 300 or fewer employees. On top of that, you must also have used the full amount of the first PPP loan on eligible expenses in order to to be eligible for the 2nd PPP loan.
The next thing you need to do is compare your gross receipts in any 2020 quarter and applicable 2019 quarter to calculate a revenue reduction of 25%.
Now an important aspect to note is that you can also qualify as long as you were in operation for all 4 quarters of 2019 AND can submit copies of your annual tax forms showing reduction in annual receipts of 25% or greater compared to 2019.
If you qualify for all of this, then make sure to start preparing. You can find more advice on how to prepare for your PPP loan and more financial advice by checking out MAIA Wealth.
MAIA Wealth is a coaching group that helps you move from revenue generation in your school to growing your personal wealth and start preparing for your retirement. Most school owners don’t have a plan for life after their martial arts school — 401K’s, Investment Portfolios, Employee Pensions. It can all feel overwhelming. However with MAIA Wealth, we have a 4-step approach so you feel prepared and have a plan for the next season of your life.
In this group coaching with Frank Silverman, we cover a wide range of topics including accounting, taxes, insurance, retirement, investing, and so much more. With a team of trusted advisors, we will help you develop the financial future you deserve.
You can learn more about the different coaching we offer by visiting:
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