After hearing concerns from small business owners across the country about the restrictions of the PPP, lawmakers passed a bipartisan bill called the Paycheck Protection Program Flexibility Act of 2020 to make the PPP easier to use and get forgiven. Still, a lot of confusion remains surrounding the terms of PPP loans. We will focus on SBA question 49 of SBA’s FAQ list to get to the root of what to do:

Question: What is the maturity date of a PPP loan?

New PPP loans approved on or after June 5th automatically have a loan length of five years. The PPP loan program is widely recognized for its forgivable nature if used for payroll, rent and utilities. Still, for a significant portion of borrowers, not all of the loan will be forgiven. The unforgiven portion will be converted to an SBA loan at a rate of 1%.

If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity. Existing loans can have their length extended from two years to five years, if the borrower and lender mutually agree to it. But what exactly does that mean for business owners who fall in this category, and how does one go about extending their existing loan?

The answer as it turns out, is not quite as clear-cut as you would hope. Lenders nationwide from longtime trusted local credit unions, to big bank chains are currently waiting on government rulings to learn how to proceed. There have been talks of complete blanket loan forgiveness roll-outs for any business owner who received up to $150,000 in PPP loans, but no concrete decisions have been made just yet. Lenders, like the majority of financial heavyweights, are taking a wait-and-see approach for upcoming changes to PPP terms as well as the forgiveness applications that are starting to roll in.

Even before the Covid-19 crisis, small business owners have long known the challenge of getting access to cheap capital. Extending two-year loans to five-year loans could be a helpful business strategy for businesses facing continued COVID-19 induced problems as we approach the tail end of 2020 and head into 2021.

To illustrate the appeal of extending a PPP loan, consider the following scenario. A small business applied for and received a $200,000 PPP loan. By using the loan primarily for payroll, utilities and rent, the business owner was able to have 75% of the loan forgiven, leaving $50,000 to be paid back to the SBA.

At 1%, a two-year loan of $50,000 results in a monthly payment to the SBA of $2,105.  The same loan over a five-year period is $855 a month.

For many small businesses, $1,250 a month can make a big savings difference. This crisis has shed light on how many small businesses operate on a small margin, so choosing the longer loan period can create better options for a sustainable business structure.

As lenders wait for further clarification from the SBA, many recommend business owners to be in regular communication with their lenders for important policy changes or updates. Depending on the bank you are working with, the likely scenario is that once you give them a call, the representative will refer you to your bank’s Business Banking Team to review your unique circumstance with a Loan Specialist. If your PPP loan falls in the two-year loan length category, the team may help you to complete reauthorization forms so your lender can approve the loan extension. Currently, there truly is no one-size-fits-all answer that can cover businesses across industries, which is what makes this issue all the more complex.

While some questions remain unanswered, it is important to do everything in your power to protect your business against future vulnerabilities and to stay vigilant to the challenges that lie ahead. The entire professional staff at RBT remains committed to helping our clients navigate these challenging times. If you have any questions, or would just like to talk about the financial future of your business, we are here for you. Please do not hesitate to reach out and connect to one of our team members.

Crisis brings out the best — and worst — in people. Some dishonest people have already turned the coronavirus (COVID-19) pandemic to their advantage by preying on unsuspecting victims and exploiting their fears.

FTC Reports Rise in COVID-19 Scams

In the first quarter of 2020, the Federal Trade Commission (FTC) received more than 7,800 consumer complaints related to the coronavirus (COVID-19) crisis. That number is expected to surge, as the rate of complaints roughly doubled during the last week of March.

Top categories of COVID-19-related fraud complaints include:

• Reports regarding cancellations and refunds for travel and vacation plans,
• Problems with online shopping,
• Mobile texting scams, and
• Government and business imposter scams.

So far, the FTC reports that consumers have lost a total of $4.77 million from COVID-19-related frauds. The median loss is $598. If you encounter fraud related to the ongoing COVID-19 crisis, report it to the FTC.

“History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need,” said IRS Criminal Investigation Chief Don Fort.

Here’s an overview of six COVID-19-related scams and practical advice on how to avoid them.

1. Fake Charities

When a catastrophe like COVID-19 strikes, philanthropists flock to donate cash and other assets to help relieve the suffering. But, before making a donation, be aware that opportunistic scammers may set up fake charities to benefit from your generosity.

Fake charities often use names that are similar to legitimate charitable organizations. So, be sure to do your homework before making a contribution. Donors aren’t the only victims to these scams — those in need also lose out.

2. Stolen CARES Act Payments

The new Coronavirus Aid, Relief, and Economic Security (CARES) Act provides one-time direct “economic impact” payments to individuals and families. If you’re eligible, these payments are up to $1,200 for single people and $2,400 for joint filers, plus $500 per qualifying child under 17. They’re considered advances for a new federal income tax credit that’s subject to phaseout thresholds based on adjusted gross income (AGI).

People who are strapped for cash may be impatient to receive the money — and cyber-crooks know it. Scammers may, for instance, call or email you, pretending to be from a government agency like the IRS. Then they’ll ask for your Social Security number (SSN) in order to receive your check. Or they’ll say you must make a payment to qualify for the check.

The IRS warns that scammers may:

• Use the words “Stimulus Check” or “Stimulus Payment.” (The official IRS term is economic impact payment.)
• Ask the taxpayer to sign over their payment check to them.
• Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their payment.
• Suggest that they can get a tax refund or payment faster by working on a taxpayer’s behalf. This scam could be conducted by social media or even in person.
• Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.

Don’t fall for these ploys! If you previously signed up to have your federal income tax refunds deposited into a bank account, your advance credit payment will come to you that way. If not, you may be entitled to receive a paper check through the mail. Either way, the U.S. Treasury won’t contact you over the phone or email you with a request for payment or sensitive personal data (such as a bank account or SSN).

3. Public Health Phishing

In a “phishing” scheme, victims are enticed to respond to a false email or other online communication. In COVID-19-related phishing scams, the perpetrator may impersonate a representative from a health care agency, such as the World Health Organization (WHO) or the Centers for Disease Control and Prevention (CDC). They may ask for personal information, such as your SSN or bank account, or instruct you to click on a link to a survey or an email.

If you receive a suspicious email, don’t respond or click on any links. The scammer might use ill-gotten data to gain access to your financial accounts or open new accounts in your name. In some cases, clicking a link might download malware to your computer. For updates on the COVID-19 crisis, go directly to the official websites of the WHO or CDC.

The IRS reports that its Criminal Investigation Division has seen a wave of new and evolving phishing schemes against taxpayers, and among the targets are retirees.

4. Retail Scams

In some parts of the United States, there’s little or no supply of certain consumable goods, such as toilet paper, hand sanitizer, antibacterial wipes, masks and paper goods. Scammers are exploiting these shortages by posing as retailers in order to obtain your personal information.

Con artists may, for example, claim to have the goods that you need and ask for your credit card number to complete a purchase transaction. Then they use the card number to run up charges while you never receive anything in return.

How can you avoid retail scams? Deal with outfits only if you know they’re legitimate. If a supplier offers a deal out of the blue that seems to be too good to be true, it probably is.

In other cases, online sellers are price gouging on limited items. If an item is selling online for many times more than the usual price, you probably want to avoid buying it.

5. Robo-Calls

Robo-calls may be increasing during the COVID-19 crisis. This scam has been tailored to fit the pandemic. For instance, callers may offer masks, testing kits and other COVID-19-related items at reduced rates. Then they’ll ask for your credit card number to “secure” your purchase.

A reputable company wouldn’t try to contact you this way. If you receive an unsolicited call from a phone number that’s blocked or that you don’t recognize, hang up or ignore it.

In addition, don’t buy into special offers for such items as COVID-19 treatments, vaccinations or home test kits. You’ll likely end up paying for something that doesn’t exist. There currently is no vaccine for COVID-19.

6. Bogus Business Emails

Businesses aren’t immune to COVID-19 frauds. Frequently, scams originate from emails instructing employees to remit goods, authorize transactions or provide proprietary data.

For example, an employee might receive an email that appears to be from the company’s president that directs the employee to transfer funds, wire money or take some other financial action. But the email is actually from a fraudster, hoping to steal money or gain access to the company’s computer system.

Under normal conditions, this type of phishing email might have raised some eyebrows. But COVID-19 has disrupted normal business operations and caused businesses to take extreme measures to protect assets and preserve cash flow. Companies may be especially vulnerable to these scams while employees work from home and don’t have the same access to management as they do during normal conditions.

Another type of phony business email appears to come from the company’s IT department. These messages might ask the recipient to provide his or her password — or to download software that turns out to be malware that infects the entire system. Employees who are stressed, overworked or sleep-deprived due to COVID-19 are easy targets for this scam — especially if an employee’s wireless home network is less secure than the company’s in-office network.

Education is the key to avoiding COVID-19-related frauds in the workplace. Remind employees about network security protocols and phishing scams during the pandemic. And provide tools that allow them to verify any communications that seem out of the ordinary and to report hoaxes as soon as possible.

Ongoing Team Effort

You’re not in this alone. The Federal Trade Commission (FTC) has ramped up efforts to protect consumers on matters relating to COVID-19. Visit the FTC’s website for more information about these types of scams and how to avoid them — or contact your financial advisors for additional guidance.

Businesses across America that have been shut down due to the novel coronavirus (COVID-19) pandemic may now (or soon) have the option to reopen.

Since no two businesses are alike — even those in the same industry and location — what makes sense for one company could be a disaster for another. But many questions that business owners are asking could be applicable to all organizations. Here are 10 questions to keep in mind as you decide whether and how to open up.

1. How will customers respond if you open your doors now? You can only make an educated guess, but this is perhaps the most crucial question of all. Let’s say you go to a lot of trouble and expense opening up, while assuming financial and health-related risks. If nobody seems to notice, that’s a big problem.
2. Can you modify your business model to improve your chances of success when you reopen? As we all know, many restaurants have been able to reopen (or remain open) by going into the carryout business. How might you change your business to accommodate customers whose needs or behaviors are different today? For example, would adding a delivery service be productive? Could you bolster your web presence to increase merchandise sales?
3. Should you offer new products and services? The pandemic is sure to change certain customer preferences and increase demand for products or services you could offer. What might they be?
4. Will your supply chain be ready to accommodate your needs? If you’re in a retail or manufacturing industry, there’s little point in reopening if you won’t have enough inventory to meet demand.
5. Will you need to do special promotions to lure customers back? Holding a “going back into business sale” might work for some enterprises. It may take an ambitious marketing effort to let former and prospective customers know you’re ready to serve them. How can you get through to your former customers?
6. What physical changes will you need to make in your business to keep employees and customers safe? Clear Plexiglas barriers are sprouting up in businesses everywhere to impede the spread of COVID-19. So, too, are measures to enforce social distancing, as well as enhanced cleaning services. Are you able to make such workplace adaptations?
7. Will your employees feel safe returning to your workplace? Already, some employees who have been asked to return to their former jobsites are balking due to fears of becoming infected. Some, including older workers and those with health conditions that put them at extra risk, may have legitimate concerns. Some of those employees may be forfeiting their jobs in taking that stance if they’re collecting unemployment benefits. And some employees may have legally protected rights to keep their jobs if you can make a “reasonable accommodation” (under the Americans with Disabilities Act) that makes them comfortable to return to work. If you are facing these issues, consult with your employment attorney.
8. Are you prepared to accept the risk that employees may contract COVID-19 at work? In terms of legal liability, you might be protected by heeding the advice of the Centers for Disease Control and Prevention and implementing their recommended safety measures, plus your own common sense. Be sure to document your efforts. If after returning to work, someone becomes seriously ill and it appears to be due to an exposure at your workplace, you may need to provide this documentation. Of course, even if you don’t face legal challenges, the predominant concern is the health and safety of your employees.
9. What are other businesses, including competitors, doing in your area? If you’re on the fence about whether to reopen, but your competitors are doing just that, you need to consider the risk of a long-term or permanent loss of market share. This assumes that customers are ready to return to the marketplace for your products or services.
10. What’s the cost of delay? If you have a lot of ongoing fixed expenses, such as rent, insurance, taxes and borrowing costs, every day you take in zero revenue puts you deeper in the hole. If instead your fixed costs are minimal, the current prospects of a rapid return to your pre-pandemic pace of business are slim, and competitors aren’t nipping at your heels, the cost of holding off on reopening may be small.

Final Thoughts

In the end, the choice you face may not be an all-or-nothing proposition. That is, you can begin to open the doors to your business a crack and wait to see what happens, before ramping up to your pre-pandemic operating capacity. That would certainly be a more prudent approach than staying closed or fully reopening.

Here’s a question from one employer about how the pandemic may affect HIPAA requirements.

Q.  Due to COVID-19, our company is planning to take employees’ temperatures and ask them general health-related questions as they report to work each morning. Does HIPAA apply to the information we obtain from employees?

A.  HIPAA’s requirements to safeguard protected health information (PHI) apply only to covered entities (health plans, health care clearinghouses, and most health care providers), not to employers acting in their capacity as employers. So, while the results of COVID-19-related temperature checks and health questions must be maintained confidentially, HIPAA doesn’t apply to the COVID-19 information that your company collects from employees. (If your company were a HIPAA covered entity, a similar analysis would apply to information maintained in the company’s employment records.)

Of course, HIPAA does apply to PHI related to COVID-19 that is created, maintained, received, or transmitted by your group health plan. This PHI generally cannot be disclosed to the plan sponsor unless the privacy rule’s prerequisites for such disclosures have been met. For example, in most cases, the PHI could be disclosed only to employees performing administration functions for the plan and couldn’t be used for employment-related actions. Therefore, it’s important to carefully document the source of employees’ COVID-19 information.

The effect of other laws should also be considered. For example, the Americans with Disabilities Act (ADA) prohibits an employer from subjecting employees to disability-related inquiries and medical examinations, except under limited circumstances. Although temperature checks are considered medical examinations, guidelines from the Equal Employment Opportunity Commission (EEOC) state that employers may screen employees entering the workplace by taking their temperatures and asking them about symptoms (such as fever and shortness of breath) that might indicate the presence of COVID-19.

The EEOC’s guidance is specific to COVID-19 and is based on a finding that the presence of someone with COVID-19 or related symptoms in the workplace would pose a substantial risk of harm to others. Although HIPAA doesn’t apply, the EEOC’s guidance notes that the ADA requires employers to safeguard the confidentiality of the medical information, which must be maintained in medical files separate from employees’ personnel files.

Chances are, employers don’t need the force of law to make them care about the health of their employees, especially during the novel coronavirus (COVID-19) pandemic. But it’s still important to know what the federal workplace safety agency — the Occupational Safety and Health Administration (OSHA) — has to say about employees returning to their jobs with a measure of confidence in their own safety.

OSHA’s recent “Guidance on Preparing Workplaces for COVID-19” report offers a helpful blueprint. However, the agency stresses it’s “only advisory in nature” and doesn’t set any new standards. Also, it falls under the underlying law’s overall requirement that employers “provide their employees with a workplace free from recognized hazards likely to cause death or serious physical harm.”

Below are some points from the OSHA blueprint to help you consider workplace safety through a new lens.

Assess Your Risk Profile

Step one in working toward a hazard-free workplace is to make an “infectious disease preparedness and response plan,” OSHA states. (You might need to recycle your plan at some future time when another aggressive virus makes the rounds.)

Consider the sources of COVID-19 that workers might be exposed to. Those include both sources at work — namely coworkers and other people who regularly come to your workplace — and workers’ potential exposure outside work.

For example, employees who commute to work via public transportation might face a higher risk of being exposed than those who drive their own cars. Similarly, employees with spouses or family members who work on the front lines, such as in a hospital clinical setting, could pose a greater risk than others.

While you can’t discriminate against employees who might be at greater risk than others, having a complete risk exposure picture can guide your overall preparedness strategy. You might have considered that the chances of a viral outbreak at your workplace were minimal before thinking about potential indirect sources of exposure, and thus decide to take greater precautions than you otherwise would.

Workplace Control Categories

“Workplace controls” for infection prevention, as OSHA calls them, fall into four buckets:

• Engineering controls. Physical measures include using high-efficiency filters, increasing ventilation, and installing physical barriers such as clear plastic sneeze guards.
• Administrative controls. This involves HR policies, safety equipment and procedure training.
• Safe work practices. Examples include “no-touch” trash cans, alcohol-based hand rubs and required handwashing.
• Personal protective equipment (PPE). This includes gloves, goggles, face shields, etc. Note: While there’s no COVID-19-specific OSHA PPE standard, some regulations may apply here. One is general industry PPE standards laid out in 29 CFR 1910 subpart I, governing when the use of gloves, eye, face and respiratory protection is required.

As the above categories indicate, infection prevention measures highlighted by OSHA aren’t limited to frequent handwashing and disinfecting of workplaces. They cover work policies you might not already have in place, for example, when employees should work from home or call in sick.

And while this isn’t suggested by OSHA, you might review your paid sick leave policy to ensure that it doesn’t discourage sick employees (potentially with COVID-19) to report for duty to avoid forfeiting pay.

Other possible policy responses to consider include staggered work shifts to lower the density of employees at work at any given time, and other ways to allow workers to spread out more (“social distance”).

Employees’ Obligations

Employees should be informed of the right person or department to contact if any symptoms consistent with COVID-19 arise, and what will happen next. Ideally, you’ll have multiple options ranging from sending the employee home immediately to moving the employee’s workstation to a more remote site. “Although most worksites do not have specific isolation rooms, designated areas with doors may serve as isolation rooms until potentially sick people can be removed from the worksite,” OSHA suggests.

Not every respiratory infection is COVID-19 related, of course. But OSHA discourages employers from requiring every sick employee to obtain documentation from a healthcare professional before deciding how to handle the situation. Erring on the side of caution is the practical solution because swamped medical offices might not be able to generate such documentation.

“Risk Pyramid”

OSHA’s guidance also features a “risk pyramid” that classifies hazard levels for different kinds of jobs and workplaces. It’s encouraging to note that OSHA believes most workers “will likely fall into the lower or medium exposure risk levels.”

Jobs with “medium” exposure risk include those “that require frequent and/or close contact with people who may be infected but are not known or suspected” to be infected. The least risky (“lower exposure risk”) jobs “are those that do not require contact with people known to be, or suspected of being” infected, nor frequent contact with the general public.”

In contrast, jobs with “very high” exposure risk include healthcare workers and those who perform autopsies working with known or suspected COVID-19 patients. The next level down in the risk spectrum are jobs with just “high” exposure risk. This includes healthcare delivery personnel (for example, ambulance drivers) and medical support staff working around known or suspected COVID-19 patients.

Your infection minimization strategy and policies can be suited to the risk classification of the jobs your employees have. For example, for jobs in the “lower exposure risk” class, special engineering controls are “not recommended,” beyond any that may already be in place for risks not specifically associated with COVID-19. In contrast, some engineering controls are recommended for medium exposure risk jobs. Those include “physical barriers, such as clear plastic sneeze guards, where feasible.”

Final Thoughts

As noted, OSHA’s suggestions are merely that — suggestions and not strict requirements. It’s helpful to read the OSHA guidance to ensure you’re aware of how contagions spread. But for your company, you and your trusted managers and advisors are in the best position to evaluate the risks that exist in your workplace, and how to minimize them.

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