EP 586 – Keeping Up With SBA Legislation With Jason Byrd

Foreign.

This is the no Closers show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close notes, Scott Carson. Hey everybody, thank you for listening. Note Nation. You're gonna love this episode. So many small business owners are struggling out there. Not only small business, but people in the real estate fields out there who have employee staff wondering what the heck to do. And we've had our guest on in a previous episode but we bring back my oldest and longest friend out there, Jason Byrd, who took a lot of time to sit down and evaluate the SBA legislation, the ppp, the disaster relief legislation that was passed over the last couple of weeks. And I think you're going to love this episode. If you're a small business owner, he breaks down kind of differences between the two. Why you should go ahead and apply for both of these programs even now if the even the government's out of money, but they're keep putting money into it. Why you want to get your application things to look at. Not being an SBA expert, but he did sit down and spend a lot of time going through on this episode and breaking down each specific aspect and how you should react to those. So if you're a business owner or know a business owner, this would be a definitely an episode for them to listen to. Free to refer out. So listen in, make sure to rate and subscribe. And while you're here, leave us a five star review. So we are going to record this guys, but we are live streaming this to Facebook as well. Jason's I think like a lot of people out there kind of feeling like okay, where do I get started? How do I help people out as best I can? And Jason does an amazing job and like I said, one of my longest friends, known him for golly going on close to 30 years now and he's.

Just probably more than 30 years.

Yeah, no, you're right about that. I think. Yeah, you're probably 33, 34 years. Two small town boys from Ingleside, Texas and Jason, why don't you share a little about who you are, kind of what you do and then we'll dive into kind of what you put together here for everybody.

Absolutely. Well, I stepped out to check on get someone to help me check on the Internet connection but no one's here. So I don't know what I was thinking. So we'll just go with it and for some reason, if it's a problem, I'll call it on my phone or something like that.

We'll figure it out.

Yeah, like you said, my name's Jason Byrd and ran the Byrd law firm for a number of years now, 15, 16 years. My primary practice, practice area is in really commercial litigation. And so not. I do some light business. I'd call light business work, but I'm capable of doing it just. It's real boring to me. So I don't. I don't typically do that work day in and day out, but in some background on why I think this is relevant is I've also spent several sessions lobbying and testifying on proposed bills and legislation, going through in a variety of different areas. So as unexciting as it sounds, I've got a little experience going through bills, proposed bill, proposed bills, new legislation. So the genesis of what we're talking about is all of this broke out. It's been unfolding over the past months and weeks. And, you know, to some degree, it's basically, my business has come to a halt. I think it'll. At some point I'll pick back up, but. But because of the litigation, I'm relying on court dates and trial settings, in person depositions, and just things that move the ball forward. And that all came to a screeching halt. So I've been trying to figure out how to restart all that. And additionally, I'm trying to figure out just how to be helpful. I'm not a doctor. I don't know anything about viruses. And on the physical and the health stuff, I'm pretty helpless there. And then a good friend of mine who's a lobbyist there in Austin, Jacob Smith, and we've been talking and we said, let's just go through these bills. Let's go through them like we would over the past 50 years, 15 years, going through legislation and try and break them down and summarize them. And he did a pretty good job of that. I helped him on some of that. But for the most part, he did that in the one document. And then what I did was kind of just a memo trying to break down some of what I thought were important provisions to the small business type of folks that I normally come in contact with. There's a ton of this, thousands of pages of legislation. Frankly, the people who passed it don't know everything that's in it. And so we've got a decent summary but there's no experts out there in it. And so what I did was just really try to break down a general strategy that I think a lot of small businesses could employ. Kind of kick it down the middle. Every situation is a little different. That's a lawyer in me and saying that you might lean one way a little more or lean one way a little more, depending on what you have going on. But just tried to make some simple advice for mom and pop up to fairly significant size concerns. So. And just said, hey, if you want it, I'll send it to you. I mean, I'm trying to make any money off of it or anything like that. Just, hey, if you want the advice, here you go. Or just the general knowledge, I guess. And so it loosely ties into my practice. You know, typically I spend most of my time fighting over money for these small businesses or individuals, typically with a bigger concern. This one, an insurance company, a bank or a larger partner or something like that, or oil company. But it all ties in. And I thought, hey, let's talk about it. I mean, all your folks are small business type people.

Yeah, I think it's. And you've done a really good job because you've got. You shared two documents, and I shipped those out. One was the 53 page breakdown of it. And yours, your six page. I don't want to say Cliff Notes version, but kind of that streamline what you thought was the most important to small business owners. So I thought maybe we start with a six page and then we'll go from there. How's that sound?

Yeah, that's good. However you want to do, man. Okay, cool.

So why don't I do this. I'm going to pull up. Let me share this. I'm going to see if I still got this pulled up. I should. Here we go.

That's the.

That's the full 53 page. Let me go over here. So, yeah, here's the six page that you put together. I thought it was well written, Jason. It answered a lot of questions. And I sat in on a few different SBA phone calls and webinars the last couple of days to figure it out. But why don't we just start first with here and we'll let you lead and I'll just scroll through this. How's that sound? And what I'll do too is I'm going to quiet my video. So it helps with the Internet as well too, for everybody. So.

And what I'll add to Scott is what we did in preparation for this is go through the bills and then go through some of really me spend some detailed time looking at some of these provisions. And also I spent about an hour on a conference call with the lady basically over Texas for the SBA last week and just kind of talking about, and this was before the, actually the passage of the, of the most recent bill, the CARES act, as they're calling it. But also want to put this in the right context, in the frame for your audience on what we're looking at, the legislation itself. Yes, that's the law. That's what the, what the law says is going to happen. But we all know that that's what says generally what's going to happen. And we've analyzed that, the practicality of how it all plays out. How do I physically go do this? There's a lot of unknowns. There's. Because typically, in a normal setting in our country, your Congress or even your state legislature will pass legislation, and then it's up to the various departments in the executive branch to have the rulemaking authority to say, okay, here's the forms, here's how it's gonna look, here's what you can do, and there's some variance in there. Well, this was all passed real fast and basically overnight, none of those regulations exist. So treasury, the SBA and other departments are trying to come up with that right now. So it's. Yeah, this is what the law says ultimately should happen, is supposed to happen, but the process getting there don't take. Just because that's what Congress passed, it's automatically just going to start happening today.

Yeah, that's the truth. Especially some of these things that the local banks don't even have the paperwork or things set up yet to start taking on applications on things like that. So, but let's kind of identify.

I've talked to one client that's actually been able to speak with a local bank to get, actually get an application. So everybody else, they're just on a list. So I'll start with the first one. And this is a provision that's contained within the CARES act that was passed last Friday. I believe it was signed by the president last Friday. And this is they're calling them PPP loans. Now for the business owners out there, you may be familiar with the SBA and the type of loans they offer. Typically, in those type of loans, they're set what they call their 7A program. It's kind of their flagship program. If you want an SBA loan and other times you go to your bank, that's an improved Lender, SBA lender, you talk with them, you fill out the application. It's a little more cumbersome than just a traditional loan, typically. And the information, they're pretty stringent, depending on the size of the loan. I'm trying to get collateral and a number of other things. This triple P program, these PPP loans are akin to that traditional type loan, okay. They're going to be operated under that system. So when you start to consider one of these loans, you're going to go through your bank and go through that process. And like you mentioned, your bank may not even have a way for you to apply quite yet. So why are these important? And I've listed them and I kind of broke them out in levels of importance. In a way, these are important. And the simple things to know about these is this is the loan that will wash away, so to speak. This is the loan that can be forgiven to a certain point. And what do I mean by that? Well, you can get a loan for up to 250% of the qualified expenses. And in here we have bullet points everybody on the call can read. It's a limited amount of things. You know, it's basically to protect your, your payroll, your health insurance premiums, your rent or your mortgage interest. And there may be a few small things that apply, but that's the main things. And so you can get up to 250% times one month, average of those things. Now, that's not the amount that will be ultimately forgiven under the legislation. Effectively they're giving you those qualified expenses up to two months to eight weeks. So you can get this loan if you're a big small business. And since they for lacks some of the, the affiliation rules that you're gonna have small businesses that you have a 2 million a month in salaries, I mean, you could, you can max this thing out pretty quick. That's not my business and probably not most of the people's business on the call, but those folks probably, if you've got that size of a concern, you know, you've got lawyers and accountants that you're already paying on staff that are going through it too. So I'm not as worried about those guys. I'm worried about really the, you know, the guys, some of us have good businesses, but shutting down for months at a time are scary. So. But what does you. The biggest limitation, I'd say probably for you and for your folks on this is just going to have to keep it within these reimbursable amounts and on the compensation for your Employees and your owners. So guys like me or you or your other owners of the business, there's folks who make over $100,000 a year, they're not going to, they're not going to forgive you for two months of their pay. So I've got the calculation right somewhere in my office. So basically eight weeks at the max pay is like 15,000, I think $134, something like that. So let's say, and I'm just using this example, let's say you pay yourself 200 grand a year out of your company divide two months. Well, you're not going to be able to get that full amount towards qualifying. You're only going to get somewhere around $7,500. So just note that. But, and it talks about it right here, you're right on in the paper. What's eligible for the payroll cost. And it's right there, you know, it's all for the most part salary related and or rent related for your place. But that's in the reason I have this first and I found it was important is because of the forgiveness. I mean that' that's unprecedented on an SBA loan. I mean it's really not a loan, it's a grant. So folks need to really take a hard look at this. For most of my clients it might differ. I could see situations potentially where it could differ. I would probably recommend going to the max of the eight weeks and then taking a look at some of the other opportunities before I really max this one out. And I know I'm kind of skipping around in terms of the paper. Right. But, and I say that because effectively the, you know, you do the formula on your basic circumstances and get the eight weeks that's forgiven. It's really grant in the terms of the remaining amounts, if you took them or you do take them, are favorable indeed. They're capped at 4%. There's a six month deferral and on any payments there's no penalty for prepayment and they're amortized over 10 years. However, those terms are not in my opinion near as favorable as the terms on an economic disaster model. So I would tell most folks with a small business to take a real hard look at that. The economic disaster loans were actually, actually funded not in the CARES act, but funded in the Families First CORONA act and it's supplement that were passed about a week to 10 days prior to the CARES act being passed at the end of last week. So, and those provide a pretty substantial amount, not obviously not $2 trillion, but you should know $2 trillion is not going to small business. I mean, it's, you know what I mean? It's a big portion that's going to big business and other into other areas. But under the disaster loans, there's a little bit of difference. And these aren't flagship 7A loans, they're 7B loans, which, that means they're coming, you're applying straight with the government, they're coming straight out of the Treasury. So if you get a loan, they're paying you out of the Treasury. Interesting. In my conference call with the SBA Texas representative, they can't go out, they can't go on a limb. But if you kind of read in the tea leaves in the past when they do these type of loans, there are a number of considerations they make that I really get the sense that they're relaxing. She stressed to us that they're looking at two things. They're looking at credit history and ability to repay. And frankly, they're looking at ability to repay more strong than anything. Sometimes as a small business you might have great credit, medium credit or poor credit or somewhere in between. But if you go really go look at everything, you pay all your bills, it's just the nature of sometimes we get out there and we don't. So that to me is pretty positive news. Additionally, there's not a collateral requirement. So typically they would require anything over about $25,000. They would require some collateral. Now that being said, if you have collateral to give, they're going to ask you to pledge it. Those loans are up to a max of $2 million. They're automatically amortized to 30 years and they're capped at 3.75% and there's a 12 month deferral on any payment and no penalty for prepayment. And so that's why I've just said, folks, let's take a look at really what your situation is, because those are frankly better terms. And I expect too that there's going to be a bit of a mad dash, a mad rush for the forgiven loans under the PPP program that just procedurally getting through the extra layer of the bank and everything else is going to, going to be difficult. And I kind of skipped over one thing there and that's the EIDL grant. It's economic, it's under the disaster loan, but it's really a grant. This is a pretty easy process, guys. You get online and right now this is where the last time I checked, this was the only thing you could apply for. You Couldn't apply for the loan yet. They're just not set up for it. In fact, last week, the SBA's disaster loan website kept crashing. They just didn't have the capacity yet. They weren't quite prepared. And I get that. But they were working on it in. But right now, you can get online and there's some pretty basic information. Your tax ID number, your principal, who owns the business, things like that, your revenue from last year, cost of goods sold, and your banking information. And they'll make a determination. And most folks who have a small business are gonna probably be entitled to this $10,000 grant. Now, the legislation says they're gonna wire it to you within three days. So we'll see.

Yeah, exactly, we'll see.

So everybody kind of. I've worked with or talked to, including me, only completed that. I think the earliest we have was Monday or Tuesday, I think Tuesday morning. So no one's received the wire yet. And I mean, we'll see. But that's a grant. That's forgiven. Now, if you end up taking an economic disaster loan under the Family First Coronavirus act program, that $10,000 will count towards your cap. But I mean. Okay, you know.

Right.

I mean. And so. And effectively, too, it's a little different. It's kind of confusing when you say it's an economic disaster loan. I live here on the Gulf coast, and so we're familiar with that from hurricanes, and that's typically what they're used for. Typically requires some type of damage to. To your business property where you shut down, you can't work because you had some type of natural disaster. They're running it through this program, but they've designated. Basically everywhere in the country has had an economic disaster and there's no physical damage required. Pretty obvious, but they've made that clear. And I just get the sense, in addition to reading the legislation, but from talking with them, they're really going to try and make these things work for people because the SBA realizes that, you know, a lot of us are going to be in a bind if we don't at least get some help. So that's the short, short and short of it. Some practical tips when you do get to these points, particularly if you apply for this second version here, I've got these economic entry disaster loans. Do it online. If you. For some reason, I doubt anybody on the call isn't able to. You know, if they can get on this call, they can probably get on the SBA website and it's listed there. But if you have friends or family that just aren't comfortable with it, help them. They will take a paper copy. But I'm telling you right now, get to the back of the line if they get you. Secondly, really make sure you have all of your information that they require. There's about five forms that will require with these. You submit it all at once. Don't. Well, I got most of it. I'm going to send it and I'll get this, this other last one when I don't. Under, under normal circumstances, that would probably be okay, but, but even the SBA reps are telling you you're just, you're just going to end up in the shuffle. And your best bet is to have everything right the first time. Really, really take care with it. Just because of the volume. They're hiring people right now on some of the legal forms. I'm on the SBA's. Hey, we need lawyers, we need counselors and advisors. They just need people because they're about to get overrun. Now, luckily, this legislation under the first bill provided some additional funding for them. So, you know, I think they'll be able to play it out. And like I said too, these bills did so much, so much other stuff. I mean, there's funding going to states under the first bill to help put some money into the unemployment benefits. There's money going towards the Department of Defense to test people. I mean, I think they put $83 million in Department of Defense for just testing people. So there's a number of items through. If you really want to geek up on it, read through it. But these are really the things that I thought most important to just day to day small businesses.

We got some questions you want to jump in and let's ask answer some questions real fast if we can, for the best that we can. Somebody asked, what's the difference between a sole proprietor and being self employed under.

The ppp, they say it's not going to matter.

Okay, there we go. Let's see here. Another one asked, how does this apply to a single member LLC that takes one or two distributions over the course of 12 months? Do you average the two distributions over 12 months or how would you figure that out?

I would average it that way. However, like I said at the start of the call, there's no regs, there's no interpretations, there's no treasury or IRS regs. So that would be the reasonable approach, but there's no answer on that. And that's the thing. If anybody tells you they're an expert on all this. Well, they're not. And because there's just. There's been no regulations on any of this, Douglas.

We are not.

Yeah. So just before I leave that, though, so, you know, take the most reasonable approach you can. Well, I typically only make two distributions. Let me average that out over 12 and take 1/12 of that to come up with my average monthly, if they're consistent. Now, if you're inconsistent and up and down, I mean, it's just hard for me to tell you without seeing the specific numbers, if it's consistently in an amount that's over the course of the year, $100,000 or more. Well, it's really easy. You're going to take the max.

Yeah. See here, if your small business is a C corporation, still eligible for a emergency Eidl. Yeah. You're still available because it covers your. Look at your payroll, look what you're paying out. If your salary's up to $100,000, figure out what that is, add those in those costs. Roger. And then two and a half times what a monthly amount would be, and that's what you'd apply for on that.

And they've been in the. And I know where a lot of these questions are coming from because there's a lot of technicalities, typically with SBA applications and different entities and how you're operating. Just know in the back of your mind, if you're not a lawyer, just generally, those have been heavily relaxed. So we're talking about, you know, sole proprietorships all the way up through C Corps. S Corps. I'm an S Corp. Single member LLCs, manager, employees, managed LLCs, multi members. Just about any type of entity out there operating is probably going to be fine. And even some nonprofits are eligible.

Yeah. All right, guys, if you're asking questions about the website, the SBA website, we don't handle any of that. We can't answer uploading questions or the fact that it's not allowing you to upload. We don't have any contact with that. We're simply going through some of these bills and giving you a bit of a guide. I don't know when you would submit it. If there's obviously an upload box link, then you probably want to upload the documents that upload link. We aren't involved with the SBA website of any sort. So for those questions, you're going to need to go directly to there and go from there. But a question here. Celeste asked a question. Emergency grant up to 10,000. What is the formula for estimate and how much a business might receive.

I don't know their exact formula. There's no regs on it. They're going to look at, you know, your numbers. They ask very little information. I suspect if you're legitimately operating business, you're going to get the 10 grand. Now, if you're doing 10 grand a business a year, you're probably not on this call. So, and I hate to be, I'm not trying to be rude, but if you're operating a real business, you're going to get ten grand. I've actually gone through the process earlier in the week. That's one of the. Well, right now I couldn't even access an application to make for the full loan. But what I could access was the grant, the $10,000 grant. And the information is pretty basic. It's name, rank, serial number. The only economic information they ask are what were your gross revenues over the last 12 months and what were the cost of goods sold? The cost of goods sold and reaching those revenues. They asked for your wiring instructions and it literally takes five minutes to do.

Yeah, and that's the thing you advise people. Hey, everybody, get on there. Apply for the EIDL apparel, get up to 10,000. And if you apply for the payroll protection one, the PPP, if you get approved for the PPP, they're going to deduct the 10,000, whatever they give you on the emergency from that amount. So you can apply for.

No, no, I don't believe so. They're going to think that they will deduct that for if you apply for a loan under the eo.

Oh, okay.

So effectively try and figure out the need as best you can. I mean, who knows what that means right now? You know, I mean, I think every day we get new information and so to the extent you can do that, but there's a way where, if you want to maximize the eight week period where they'll fully forgive and get the 10 grand, it could all literally be money that's quote, a loan. But it's all either it's either partially a loan and a grant or it's all forgiven. So I mean you could get effectively eight weeks in the ten grand and not ask for any more and not owe anything back. I'll caution people against that for one reason. The SBA reps are cautioning against that because of uncertainty. You may in three months determine, well, ma', am, maybe I really needed to ask for a little bit of loan, you know, 200,000. I'll just use a number getting back in front of it in the system could be problematic. They are telling us, ask for your maximum. You think you'll need. That doesn't mean you have to take it. You could get approved for a $2 million loan and take 100,000, because that's what's going to be either a grant or paid back or forgiven. But I would ask for it on the front end as opposed to the back end. At least have that flexibility, because flexibility helps in situations where there's a lot of uncertainty.

That's the truth there. Let's see here. Nicole says SBA forgivable grants to 10 million. How does that work? And the SBA disaster loans, 2 millions. Can you explain? And then Kerry asked a question. Our business is the 52 range on the NAICS code. We have more than 500 employees. But based on the SBA set, we qualify off of our gross receipts of income, which should be under 41.5 million. Do you know if the SBA will look at several years of tax returns or the last tax return that was filed with the IRS to determine our gross receipts?

No idea, because there's no regs on. So, I mean, they're right in that right now they're determining that policy. I suspect they'll look at your last return or your last 12 months, your last full year, based on talking to them and just taking the spirit of the legislation. It's really a point at which they've tried to make it as open and available, from my perspective, than I've ever seen. But if you're right on that cusp, who knows? We'll see what they write.

And then a couple of big things, I think, seeing questions asked on other things like that this stuff is for your employees that are inside the United States, for the most part, the people that are paying taxes. If you've got contractors on payroll outside in Mexico or something like that, that doesn't encompass them. If we got VAs in the Philippines, doesn't cover them. This is gonna cover your domestic job employees. Now, if you've got somebody that's living abroad but still doing work here, who's a United States citizen, it would cover their payroll, but not somebody who's foreign to the United States. On that. There's a couple big things there, too. And I think belief that to get the grant forgiven, you've got to continue to pay out and have payroll and keep people paid for the foreseeable future.

Right? You have to pay them for those time periods which you took it for. So, example, let's say I have $100,000 a month payroll for use of an easy, you know, number. And I take out the max 250, okay? I take 250,000. I get the money, I lay everybody off. Well, you're going to owe money back that you're not paying using the pay for folks.

Yeah, exactly. And that, you know, seeing some people talk about it like we, you know, like. Well, as far as some banks that don't even have the paperwork yet, if you've got an SBA approved lender, you know, you don't necessarily have to. If you don't bank with an SBA lender, it might be good to. If not, you can jump on the website and go there or go in and maybe if your bank does have somebody helps out with that, can walk you through it. Maybe you get a little better service with it's, you know, somebody's there. But I know that a lot of the banks are still trying to figure out exactly how they're going to collect that documentation and submit it. Some may be easier, some may be a little more difficult. The reason that they're at least doing it, make it go through the banks, though, is at least there's some way to some systems to submit those maybe to offset the SBA website being bombarded nonstop with that stuff. So I think got employees and you got payroll. Hey, this would be something to get on there. And especially next week is probably going to be a better time to do that. But I would like what Jason said, I would jump on definitely and apply for the Eidl one.

Right? At least apply for the ten grand now.

Yeah, exactly.

I'll add to that. We're told that they're gonna have by this Friday. I guess that's tomorrow. I'm starting to forget the days. They are blending together, aren't they? Tomorrow they're supposed to have the SBA paperwork out and some. And some more solidity on the regs. But like I said, I mean, this is all happening real fast. So oftentimes I think those things are said are aspirational. So just stay on top of it, keep checking it. Some banks I'm for Family Services here in Southeast Texas is a nonprofit. We run the battered women's shelter and in the counseling center and our bank, they're already working with us. We've got the application. We're working on it. That's the only folks I've talked to that have actually even been able to get an application. So none of my business. Folks. I know one of the big Banks here has said, look, we're just putting people on the list. So I don't know. There's a question here, I think from Andre, I may have said that wrong, that what's considered cost of goods sold? Well, that's not defined. There's no regs on that. But generally what, you know, I just would look at what's your overhead versus your revenue if you're a service based. Well, it's hard, you know, for example, it's hard for me to say, well, what's the cost of my goods sold? Well, I provide a service, so I look at my underlying overhead is what I've done.

Yeah, I mean, that would be like with your rent and mortgage costs and your payroll and you want to include in. Not the net, you want obviously include the gross with all the payroll taxes in there too. If you're applying for the PPP as part of the.

But I was, I was talking that specifically was talking in reference to the $10,000. Okay, what's it take to run and what were my revenues? I mean, it's, there's not a whole lot of questioning there. It's just saying, hey, generally, what are you, what are you doing? But there's, like I said, there's no guidance I can point to you with the SBA or with treasury or anybody. So it's just take a reasonable approach is all I can tell folks as far as the details until more comes out.

Yeah, and this is, I think you and I both agree this is just the first way I think we're going to see a lot. A couple other bills that get passed here in the near future. Preacher too, huh, Jason?

Yeah, I would think so, but I don't, I don't know. I. For example, I mean, you, you see, I'll tell you, a lot of school districts say 1st of May is when we're planning going back to school. And my wife, actually, you know, Jennifer, just started teaching this semester. So go figure. She had worked for 17 years and she decides to go start teaching and now she's having to zoom all these kids and all this stuff. But, you know, I told her nicely, I said, if you think you're going back to school this year, you're crazy. And so a lot of it's dictated to the extent there's restrictions on us. Well, I know it's aspirational that, hey, this is all over by April 30th. Now, what happens if 80,000 people between now and the end of the month pass away from coronavirus? You think we're open and wide back open. I don't think so. And also, you know, I don't know what kind of business folks you've got on the call, but I'll use me as an example. So I've got a litigation practice, and when we fully full back open, it's not like, okay, day one, we're back at 100%. Everybody is in the same boat. Nobody else handling the litigation has that access to the courts. And it's going to be slow going. So for every month we're shut down in my business, I feel like we're kind of got a 4 to 6 month lag getting back up, so. And I think the folks at SBA are going to understand that. They're going to have to.

Yeah, I think we're definitely going to see that. We see that on our real estate stuff side, especially on the investment side. When you've got tenants that are applying for delayed rent, or we've got borrowers that are reaching out and asking for forbearance agreements or delayed on their mortgage payments, you just have to expect that. I think this, the next round of bills is going to deal directly with that, with the real estate side of things. This is the deal with your employees. The immediate thing of trying to keep people some sort of work or some sort of salary to help solve some things. I know I've got friends here that run businesses that are like, they're coming out of pocket to pay payroll till the end of the month or a week or two, and they don't know what they're going to be able to do after that. So this is a, this is a good thing. You know, it kind of feels like the little Dutch boy putting his finger in the dam. Right. Trying to stop so many different ways of bleeding.

Yeah, it is. But I think for those of us willing to hustle and to be patient and streamline, I mean, you'll be able to survive and then some of us won't, though, you know.

Yeah.

If you're not in a position where you can demonstrate you can repay the actual amount of money you need, then, I mean, your business is probably not going to make it. And I know that sounds harsh, but that's just how it goes. That being said, though, even if that happens, that's not the end of the world. You know, we're resilient folks. And the solace I've gotten from it. I was talking to a client this morning and I said, you know, the good news for me is, hey, at least we're all in it too. You know, I'm not the only one who's nervous about it. I'm not the only one who can't fully operate my business. I mean, it's all of us. And so, you know, the rising tide floats all boats and it brings them all back down too, you know, and we just gonna have to ride it out.

Yeah, exactly. Somebody asked the question. I run a third party warehouse. We store products and ship them out. How does the cost of goods sold calculate for that? That's where you're pretty much gonna take your salaries and your business costs. And that's what you're gonna figure in. Yeah, you don't have any stuff, but you know, that's the thing you're looking at. What are your costs? And figure that when you submit in your documents.

All right, yeah, well, and in that, that's the question that's, that's being asked with on the $10,000 grant. Literally asked you to fill in a blank and put a number. What was your, what, what was your estimated revenue? What was the cost of the goods sold? So you just. Your general overhead to generate that revenue is the number I would put at this point without any regulations. And I knew, and that was the one danger I knew we'd do this. Everybody would have a lot of specific, well, how are they treating this? How are they treating. And they don't know how they're treating this or treating that. And so that's really why I just have to say let's try and take the most reasonable approach how you would think it would be treated.

Yeah, exactly. Just try to take a little common sense and figure that out there. We don't have all the answers here for you. It's just meant to be a guide. And like I said, if you've registered for this, I sent an email out with the two forms that Jason provided. We went through the sixth page, the 53 page. I don't think we want to go through that. Unless you've got some stuff that you want to identify that, Jason. But everybody else read that themselves.

I mean, it's really, really just some bullet points, summaries of each section of each one of the bills. 90% of it will not be applicable to the folks who are interested in this information. And then frankly, it doesn't have near as much information with respect to what my other paper does. Because I wanted to highlight those. Because after doing this for 20 years, you know what's going to be for the most part important to your folks and what's not. And just try to give some general advice as to, you know, here are the bare bones, what you got to know. And for the information in here, I mean, this will, this will walk you through it. You're not going to get hurt if you just kind of follow what I've got down here. What you can't get, what you can't get. Now actually going through the physical steps of doing it once again, who knows, you know, I just stay on your bank. Well. And get on their list if they don't have the forms, if you're interested in that, and then just keep tabs. I even list the website with regards to the economic injury disaster loan. Just keep on tabs and keep going there, you know, go every morning and then in the meantime, apply for the $10,000 grant. At least get that coming.

Yeah. Castle asked the question, can contracted revenue be used, amount of profit expected on a property under contract, but not closed on yet and in jeopardy of now of not closing? I don't think so, Castle, because that's. It'd be really kind of hard.

Well, I don't know the answer to that. I can. I'll start putting my lawyer hat on. And if I was representing you, I could make a pretty coherent argument that it should be applied. But they're really. What I think they're going to be looking at is not what your anticipated revenue was, but what traditionally has your revenue been. Then taking the. The idea that if traditionally your revenue has been in this ballpark range, then if they give you a million dollar loan at 3%.75% and you come back into a traditional what you're doing, are you going to be able to repay it? That's really what they're looking at.

Traditionally, it's been really hard to get an SBA loan if you're a real estate investor or you're doing fix and flips that just don't really apply to it. There's a whole formula for getting lines of credit and being a business owner, stuff like that. You may want to check out our buddy Merrill Chandler, who does that with get fundable or credit sense and helping. And it lines up even how your entity is set up. There's a lot of names that are like blacklist immediately red flag that they won't lend on investments, bank fund, anything like that can be a red flag that won't, you know, they qualify immediately.

And that's why I thought it was important to talk to you and your folks because, you know, if you've been in your business, you automatically think, well, sba, what the hell is that going to do for me?

Right?

And it's not your mama's SBA type loan. You know, I mean, it's really a unique situation and likely one of the only times, hopefully, that you'll ever really fall under the gamut of sba. And it's because of the situation from sole proprietorship up to C Corps relaxed affiliation rules, they're really making it wide open. And particularly those disaster loans coming straight out of the treasury, they never do that. It's always the 7A flagship program. They're just cutting you the money. They're just literally printing the money to give to you.

Yeah, Leila just dropped me an email. @scottclosenotes.com is my direct email. I'll make sure and send over the two forms that we talked about that Jason put together. If you registered before we went live, you would have gotten a link, but if not, just drop me an email@scottclosednotes.com and I'll be glad to forward over the two forms for you. All right, Leland. And then you can always. Jason, do you mind if people reach out to you as well?

That's fine. I mean, you know, my litigation slowed way down, so that was part of why I took all the time to do this. This is just trying to be helpful. I mean, just sitting here and there's three kids, three teenage kids at my house being homeschooled. I don't want to be there. So I'm just sitting in my office and doing zoom calls and zoom hearings and helping folks and really walking friends and family through this stuff. So, yeah, I got a problem with it. Awesome.

What's the best way for people to reach out to you? Want to drop you an email and it's there.

Yeah, sure. It's Jason. I guess that would help if I give it to him. Jason J A S O N @TX by R D.com so Texas abbreviation and my last name. TX bird.com same website. Or you can give us a call at the office, you know, anytime. 409-924-0660 he's also the host of the.

Popular podcast the Bird Chronicles as well.

Well, I haven't been doing many lately, and I'm, you know, the first of the year. I've just been busy and. But I did one this week on family law, and I thought it was important because, you know, all the family lawyers are here. People with schools closed and it overlap with spring break and folks fighting over who's got the kids and who does this. And these are, you know, when a lot of more folks are cooped up, we see a higher incidence of domestic violence and all kinds of stuff. So I wanted to, I had a family lawyer really to talk about those issues that I know nothing about other than society, you know. And I think I'm gonna do one tomorrow on Friday evening with my best buddy who's not a lawyer. And we're just gonna sit here and basically drink and there you go talk shit.

Hey, that's the best there for you. Patrick says thank you so much for the handout to your time. It really helped. Thank you both. No problem, Patrick. Glad we could help out.

And let me say this again too, Scott, to that point. And you're welcome, guys. Like I said, this is really me just offering it out. I don't want anything for it. If you can use it, great. If not, just throw it away, you know, you're not hurting my feelings.

Yeah, exactly. And if, you know, somebody could be helpful to feel free to forward onto them as well.

For the most part, I've just been trying not it just the lawyer and you know, I didn't want to just post stuff on the Internet. Even though I have disclaimers in it saying this isn't legal advice. I'd rather it be if you get the information, you got it from one of our contacts. It just makes me feel a little better. I'm not sure why, but anyhow, good stuff.

Well, it's all field. It's that you've always been that way, wanting to help out people as best we can. I think it comes from the small town grassroots and both of our parents being, you know, entrepreneurs and small business owners as we grew up. If you guys need my email, mine's scottclosenotes.com if you register, I'll be sending a follow up email out with a replay for those that registered for this as well. But Scott@weclosenotes.com and Jason's is Jason at TX. TX B Y R D bird spelled with a Y textbird.com and that's his best thing. And I'll once I'll email his contact information out to everybody as well. Actually, if you've got the email that I forwarded, his contact information's in the email that I sent out as well.

So. Yeah, and I think it's on the Bird Chronicles website too. You could probably, I think, I think there's a link. I don't tell you how much, how serious I take the podcast. It's just for fun.

But hey, whatever. That's the best. That's the beauty of. Yeah, you got some interesting interviews on there. Wendy Davis on there and then a few other people too. Recently or in the past, I had.

A buddy that was a professional MMA fighter, so that was kind of fun. Now he's an insurance salesman. Go figure, right?

He probably is the best client. I'll arm wrestle you for you to sign. Exactly. So. All right, guys. Hey, that's gonna wrap it up for this. Jason, once again, thank you, bud. So much for coming on and provide stuff. We'll as stuff comes out, we may ask you to come back on if that's cool.

Anytime. You know, if I don't know, obviously I'll tell you that. But I'm happy to help in any way I can.

Yeah. All right. Leila Scott at. Yeah, scottclosenotes.com simple email address. Just drop me an email. We'll see you guys later. Sam.