November 19, 2020

RECORDED WEBINAR – The PPP Loan Forgiveness Gates Have Opened: Are You Equipped to Apply?

Download our recorded webinar to hear from the Anders CARES Act Research and Response Team on new details of PPP loan forgiveness you need to know before applying.

The recorded webinar covers the recent Small Business Administration (SBA) guidance on PPP loan forgiveness and insights on:

  • How to work with your bank now that the application portals are open
  • SBA Necessity Questionnaires Forms 3509 and 3510 
  • Strategies for achieving maximum loan forgiveness

Download the webinar below.

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November 17, 2020

Helped Local Private High School Obtain Forgiveness for $1.5 Million PPP Loan

A St. Louis private high school was looking for help navigating the changing regulations of the Paycheck Protection Program (PPP) loan they had received to retain over 100 employees. By partnering with Anders, the organization received guidance and assistance from their advisor and our COVID-19 Resource Center that helped them navigate the nuances and requirements. Anders worked with them to track expenses and submit their $1.5 million PPP loan for full forgiveness.

Learn more about Anders COVID-19 Business Recovery services.

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November 17, 2020

Making Your Business Valuable During COVID-19: Pivoting a Service to a Product

Service companies are disproportionately impacted by the economic disruption caused by the COVID-19 pandemic. While consumers are cutting back on services to save on costs and avoid human contact, they are still buying products that solve problems and meet their needs. Businesses are purchasing products like Microsoft Teams for teleconferencing and internal communications. Individuals are purchasing home gym equipment instead of a service like a personal trainer. This has caused many service-based businesses to throw away the usual playbook and are pivot to provide a product to their customers.

Pivoting in Action

Rather than having customers visit their restaurant, we have seen restaurants have neighborhood deals to deliver to the consumers. By turning a “Taco Tuesday” into an “emergency burrito with a margarita kit”, customers can have the safety of their own home, but still have a product they desired. After spending all day in the home with their new co-workers (aka children), the taco and a margarita is answer to their unique need.

Making this pivot from a service to a product can help make your business more valuable and should be done strategically. Finding your product’s niche, identifying what problems it will solve and stating expectations to customers are important first steps.

Find Your Niche

One of the first steps is to determine your companies’ niche. This can be counterintuitive because your instinct in a down economy is to need more customers, not less, but it is a critical move in creating a product. Picking your niche helps you focus on a single type of customer and design a product to efficiently reach the target audience. Services are adapted and customized for a variety of customers while a product typically fits one type of buyer.  

Identify the Problem You’re Solving

Rank your services and focus on which can solve a problem. Be clear about what problem your product solves for your niche then brand it. With a service, you are hiring the right person for the job. With a product, you are selling a “thing”, so having a solid brand with a clear purpose is essential for turning your service into the product.

Clearly State Expectations

In order to turn your service into an everyday product, it must have the feel of other products. When you run a service you typically price everything out by the hour. A product has the price tag on it upfront. When you pick up any tangible product at the grocery store, there is a list of their ingredients. Show an itemized list of what your customers get when they buy from you.

Service providers have been hammered by the global pandemic. If you can pivot your service to look and feel more like a product, you can move your company into more stability in these uncertain times. Anders can help your business add value to build a more durable business coming out of the pandemic and help transition the business when you’re ready. Learn more about our Business Transition Planning or COVID-19 Business Recovery services or contact an Anders advisor below.

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November 10, 2020

PPP with Paul and Dan Video Series

With new updates and legislation evolving quickly around the Paycheck Protection Program (PPP), our CARES Act Research and Response Team has been focused on relaying information you need to know. Two of the team members, Paul C. Rhea and Daniel K. Schindler, are sharing the latest changes around PPP loans and the forgiveness process in their video series: PPP with Paul and Dan.

View each segment of the series below. Check out more CARES Act content in our COVID-19 Resource Center, or learn how we can help your business recover from COVID-19.

November 10, 2020

October 13, 2020

October 7, 2020

September 18, 2020

September 4, 2020

August 28, 2020

August 21, 2020

August 13, 2020

July 24, 2020

July 16, 2020

June 25, 2020
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November 5, 2020

Secured $150,000 in Missouri Small Business Grants for St. Louis Restaurants

With local pandemic restrictions taking a toll on St. Louis restaurants, our CARES Act team helped restaurant clients evaluate and secure much-needed funding. Missouri Small Business Grants were one of the funding options available for eligible food service businesses. Our CARES Act team helped three local restaurants apply and obtain $50,000 each in Missouri Small Business Grants that helped keep their staff employed and doors open.

Learn more about Anders COVID-19 Business Recovery services.

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October 9, 2020

New Streamlined Forgiveness Application for Smaller PPP Loans

Businesses with Paycheck Protection Program (PPP) loans of $50,000 or less can now utilize a simpler forgiveness application. The new application, released by the SBA and U.S. Treasury, is meant to streamline the PPP loan forgiveness process for borrowers and lenders.

Details of the New Application

The new application comes out of a new interim final rule (IFR) providing guidance on forgiveness and loan review processes for PPP loans of $50,000 or less. Borrowers with affiliates that received loans totaling $2 million or more are not eligible to use the new application. Under the IFR, eligible loan borrowers are exempted from any reductions in forgiveness based on:

  • Reductions in full-time equivalent (FTE) employees
  • Reductions in employee salary or wages, and

According to the IFR, of the 5.2 million PPP loans approved by the SBA, about 3.57 million, or $62 billion of the $525 billion, were for $50,000 or less.

Good News for Businesses with Smaller PPP Loans

For borrowers with PPP loans less than $50,000, this is good news as they are not required to perform complicated FTE or salary reduction calculations. Borrowers of $50,000 or less still will have to make some certifications and provide documentation to the lender for payroll and nonpayroll costs.

Before deciding to move forward with the new application, make sure to check with your bank on if and when they are starting to accept applications. View the instructions for completing Form 3508S or the Form 3508S application.

Legislation is continuing to evolve and it’s important to keep up with the latest rules and regulations to make sure you’re making decisions based on accurate data. Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

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October 8, 2020

Business Interruption Grant Program Offers Pandemic Relief for Illinois Businesses

The Business Interruption Grant (BIG) is a historic recovery program for Illinois small businesses hit hardest by the ongoing pandemic. The first round of funding released $49 million in August to 2,655 small businesses across the state. Grants averaged $17,000 and were used to cover expenses such as payroll, rent, and other operational costs for small businesses in economically distressed areas.

Round Two

The second round of BIG will provide more than $200 million to heavily impacted industries and disproportionately impacted areas. The Department of Commerce and Economic Opportunity (DCEO) has pledged that at least half of all remaining funds, totaling more than $100 million, will be reserved for businesses in downstate and rural communities of Illinois.

Eligibility Criteria

  • Must be an independently owned and operated for-profit corporation or limited liability corporation, partnership, or sole proprietorship authorized to conduct business in the State of Illinois; OR a 501c3, 501c6, or 501c19 nonprofit;
  • Must have been operating for at least three months prior to March 2020;
  • Must have had less than $20 million in revenue in calendar year 2019, or a pro-rated amount if in operation for less than a year prior to March 2020;
  • Must have experienced operating losses since March 21, 2020;
  • Must have been closed or had reduced operations due to government orders, public health guidelines, or depressed consumer demand during the COVID 19 pandemic;
  • Must have complied with all relevant laws, regulations, and executive orders from the State and federal government, including the social distancing guidelines as promulgated by the Executive Orders of the Illinois Governor


Applications will be reviewed on a rolling basis until all funds are exhausted. Access the BIG application here.

This is a brief summary of the Business Interruption Grant (BIG). Contact an Anders advisor below for more details on applying, eligibility and other information.  Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

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October 7, 2020

Selling Your Business? SBA Clarifies Change of Ownership Rules for PPP Loan Borrowers

Many businesses have received and benefitted from Paycheck Protection Program (PPP) loan funding during the pandemic, but the rules on loan forgiveness have continued to evolve. On October 2, the SBA published a Procedural Notice regarding “change of ownership” in the event that a PPP loan is still outstanding at the time of the sale of a business. It was obvious from the loan documentation that was originally signed, that the sale of a business would be problematic while the loan was still outstanding. Borrowers and advisors have been anxiously awaiting clarification. Highlighted below are the primary areas that were defined.

How does the SBA define “change of ownership”?

The SBA defines a change of ownership in a business when one of the following occurs:

  1. At least 20% of the common stock or other ownership interest of a PPP borrower, including a publicly traded entity, is sold or otherwise transferred, whether in one or more transactions, including to an affiliate or an existing owner of the entity                                                                     
  2. The PPP borrower sells or otherwise transfers at least 50% of its assets, measured by fair market value, whether in one or more transactions
  3. The PPP borrower is merged with or into another entity

When is SBA approval required?

SBA approval is required on all sale transactions, with the exception of any of the following situations where only lender approval is necessary:

  1. The PPP loan is fully satisfied, which means the loan is either:
  2. Paid in full; or 
  3. Forgiven by the SBA (i.e., the SBA has remitted payment to the lender) and any unforgiven amounts are paid in full.
  • In a stock sale or merger:
  • A sale or transfer of less than 50% of the borrower’s common stock or other ownership; or
  • The PPP borrower completes a loan forgiveness application reflecting its use of all loan proceeds and submits it to the lender and puts in an interest-bearing escrow account controlled by the PPP lender funds equal to the outstanding balance of the PPP loan.
  • In an asset sale of 50% or more of the borrower’s assets, if the PPP borrower completes a loan forgiveness application reflecting its use of all loan proceeds and submits it to the lender and puts in an interest-bearing escrow account controlled by the PPP lender funds equal to the outstanding balance of the PPP loan.

What is the borrower required to do prior to the sale?

Prior to the closing of any change of ownership transaction, the PPP borrower must notify the lender in writing of the transaction and provide the lender with a copy of the relevant transaction documents necessary to effectuate the proposed transaction. The lender is required to submit certain documentation regarding the transaction to the SBA within five business days of the completion of the transaction.

Despite the occurrence of a change of ownership, the PPP borrower remains responsible for:

  1. Continued performance of all obligations under the PPP loan;
  2. Certifications made under the PPP loan application, including the certification of economic necessity; and
  3. Continued compliance with all other PPP loan requirements.

The PPP borrower continues to be responsible for obtaining, preparing, and retaining all required forms and documentation and providing these forms and documents to the PPP lender, servicer, or SBA upon request.

The new owners are liable for any unauthorized uses of PPP loan proceeds by the new owner.  If the new owner also had a PPP loan, the PPP loan funds must be segregated and properly allocated among the two borrowers.

Where do we go from here?

Although many questions were answered in this most recent guidance, there is much still that remains unanswered, including:

  • How can I speed up the process if pending M&A activity is imminent?
  • What happens if the bank allowed a sale to already happen prior to the new guidance?
  • What recourse do I have if my bank isn’t accepting applications yet?
  • Who is responsible if SBA reviews a loan years later and nullifies some or all of the forgiveness?

Read the full SBA Procedural Notice.

Open and upfront communication with your bank and/or advisors is critical prior to any transaction. Legislation is continuing to evolve and it’s important to keep up with the latest rules and regulations to make sure you’re making decisions based on accurate data. Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

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September 29, 2020

Net Operating Loss Carrybacks Offer a New Cash Flow Opportunity Under the CARES Act

The CARES Act has created many tax planning opportunities for individuals and businesses alike. One of these opportunities is the ability to carry back a net operating loss (NOL) that occurred in a taxable year beginning after December 31, 2017 and before January 1, 2021.

What is a net operating loss?

A net operating loss (NOL) occurs when a company has more allowable tax deductions than it has taxable income. NOLs reduce either past or future taxable income from loss carrybacks or carryforwards. In recent years, tax reform bills have altered the treatment of NOLs though the Tax Cuts and Jobs Act of 2017, and the more recently passed CARES Act.

What are the carryback benefits?

NOLs can now be carried back up to five years to fully offset a prior year’s taxable income resulting in a refund of income tax paid in that year. If choosing to take advantage of this opportunity, the losses must first be carried back to the earliest available year of income.

Since the loss can be carried back to years before the Tax Cuts and Jobs Act, refunds can be generated at a more favorable tax rate of up to 35%, rather than the more current 21% rate. These refunds have the potential to provide cash flow relief for many manufacturers.

How can I claim a refund for NOLs?

Depending on the year the loss incurred and date the return was filed will determine the best method to file a claim for refund. Businesses will be allowed to file Form 1139, Corporation Application for Tentative Refund, or file an amended corporate tax return. Individuals, trusts and estates can file Form 1045. If you have the option, Form 1139 will be processed faster, resulting in a quicker refund compared to filing an amended return.  Please refer to Notice 2020-26 for further filing information.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

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September 28, 2020

Why PPP Loan Fraud is on the Rise

In response to the global COVID-19 pandemic, the US Congress moved extremely quickly to enact the largest economic stimulus bill in modern history. At Anders, we’ve been dissecting the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including each of the stimulus elements in the Act. One major portion of that economic stimulus, estimated at $669 billion, came in the form of Paycheck Protection Program loans (or PPP Loans). These PPP Loans were potentially forgivable loans issued to small businesses with the intention of keeping their employees employed.

While PPP loans offered much-needed assistance to many businesses impacted by COVID-19, there have been a few instances where the relief efforts were abused. We are now in the midst of the first wave of notable PPP Loan fraud cases, which presumably will continue to make headlines for quite some time.

Uncovering PPP Fraud

PPP Loan issuance began in earnest in April 2020. In a matter of months, alleged PPP Loan fraud was already being reported across the nation.

In late July 2020, it was reported that a Miami, FL man had been charged with bank fraud for allegedly lying on PPP Loan applications. The alleged fraudster used the PPP Loan proceeds for luxury items such as purchases at Saks Fifth Avenue, luxury hotels, jewelry stores, and most notably a Lamborghini Huracán EVO, valued at nearly $320,000.

On August 4, 2020, the US Department of Justice issued a press release regarding a Houston, TX entrepreneur who allegedly obtained more than $1.6 million in PPP Loans, using those funds to purchase a Lamborghini Urus, a Rolex watch, and real estate among other things.

In September, Reuters reported that according to an internal memo, JP Morgan Chase & Co., one of the many banks tasked with distributing the PPP Loans, was investigating employees who may have been involved in the misuse of federal funds meant to help struggling small businesses hurt by the COVID-19 shutdowns.

Most recently, former NFL wide receiver Josh Bellamy was arrested as one of eleven participants in an alleged $24 million PPP Loan scheme. Bellamy allegedly used funds to purchase luxury goods from Gucci and Dior and withdrew over $300,000 in cash.

These are just a handful of notable PPP Loan fraud examples that have made the news headlines. As of mid-September, the Justice Department had charged 57 people with trying to steal a total of $175 million in PPP Loans, and this is likely just the beginning.

Preventing PPP Fraud

To ensure this type of fraud doesn’t happen in your company, businesses should become familiar with the concept of the fraud triangle, and how it can be a useful tool in understanding fraudulent behavior. Put simply, the concept theorizes that fraud is likely to occur when three elements occur together. Those elements are opportunity, motive/pressure, and rationalization.

The COVID-19 pandemic prompted an unprecedented governmental response in an attempt to prevent millions from losing their jobs.

In a haste to distribute these funds, an unprecedented opportunity for fraudsters was created which would not have been available under normal circumstances. There was no time for the PPP Loans to go through the normal vetting and underwriting procedures required for most commercial loans, as more than 5.2 million PPP Loan applications were prepared and processed during a matter of months.

At the same time, in what was likely the worst economic downturn since the great depression, there was ample motive and pressure for many to commit fraud. That is casting the ever-present motive of greed to the side.

Finally, while we know fraud is not a victimless crime, some may find it easy to rationalize “borrowing” money from the Federal Government. Afterall, the Federal Government just prints the money, don’t they? And who is going to miss a few hundred thousand dollars from a $2.2 trillion relief bill?

In reality, these fraudulent actions hurt us all. Taxpaying citizens are the ones being taken advantage of. Further, people are stealing from a program designed to help struggling businesses keep employees on the payroll during a time of great turmoil.

Sadly, but predictably, these fraud cases are appearing, and unfortunately will likely continue for some time to come but preventing fraud in your own company is key.

If you have any questions regarding PPP Loans or fraud prevention, please contact an Anders advisor below. Learn more about Anders Forensic and Litigation services or how we help businesses with COVID-19 Business Recovery.

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