Jason interviews Jessica Mah, founder of inDinero, who teaches us how to us get loan approval for the available SBA loan programs. The two programs discussed are Payment Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program.


Investor Testimonial 00:00
Well, I like real estate just because I like the benefit of being able to have a mortgage pay off real estate over time so that when I retire, I have something I like the fact that it’s boring. I want to be able to be entertained and travel and do a lot of things in my retirement. And that boring investment of real estate allows me to do that.

Introduction Speaker 00:25
Welcome to the creating wealth

Introduction Speaker 00:26
show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions.

Introduction Speaker 00:59
This program will

Introduction Speaker 01:00
help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete

Introduction Speaker 01:11
solution for real estate investors.

Jason Hartman 01:16
Welcome to Episode 1439 1439. And that means tomorrow Yes, we have our everyday podcast coming to you seven days a week now, which probably won’t be forever, but there’s a lot going on in the world. And we feel a duty and obligation, a sense of Noblesse so bleach. Hey, there’s a vocabulary phrase for you. It means nobility obligates noblesse oblige. Anyway, we feel a sense of noblesse oblige, to keep you informed and today will be no exception, because we’re going to talk about the bailout programs. That, interestingly just ran out of money. But don’t worry, they’ll be back. There’s more coming 99% chance. So this is well worth listening to. It looks like there’s no shortage of graft and corruption and fraud in the free market sector either. But, but at least there are different accountability mechanisms that aren’t available in the government sector. So that’s the difference. And hey, in the government sector, we are all getting defrauded. In the private sector. only select people, like customers have a bad business, or competitors of a bad business. All of these things, by the way, have happened to me. Sadly, I know play your violins. I’ve definitely been a victim you probably have to. So you know, it just selects a small affects a small number of people but when it’s the government, it affects all of us because it’s all our money and it’s either our money And most people would say as tax payers, and that’s true, but that’s the amateur game. The real victimization comes as we are dollar holders and dollar savers. And of course, there are two forms of taxation. In essence, there’s the tax that we see that we’re paying income tax, sales tax, excise tax, all of these tax tax, tax, tax, tax tax everywhere tax tax, but there’s also of course, the inflation tax which destroys the purchasing power of our our money and other things, the purchasing power of our debt that we pay back to our lenders Of course, and we love that as real estate investors, and it makes debt our favorite four letter word, doesn’t it? Yes, it does. Okay, enough of that because you’ve been listening to the show and you already understand what I’m talking about. But But tomorrow is a 10th episode show which by the way, you are going to just love It’s my interview. with Mike Robbins, and we talk a lot about how the quarantines and the pandemic is affecting people and it is really so sad to see. You know, I read an article yesterday that said, calls to suicide hotlines are up by 800% 800% increase in calls to suicide hotlines, the left has now begun to vilify the right in the political spectrum around the world, because the right wants to put people back to work and reopen the economy. And the left says, How can you be so callous? That is so terrible for you to say something like that when lives are at stake? And that is true, but it’s not the whole story, which is the common thing with the left. There is certainly a nugget of truth. They are right about that. Yes, we have to be very careful. There are lives at stake, but the question is How many more lives are at stake by driving people into poverty by forcing people into solitary confinement into loneliness? I mean, look, folks, I’ve talked about this before, in England. I mean, this was maybe a year ago when I shared this story with you. They actually appointed a whole new ministry in their government, the Ministry of loneliness, it is such an epidemic. You know, you read these articles, especially about older people, but it’s not just about older people, okay. People of all ages suffer from the loneliness epidemic. Well, actually, maybe we shouldn’t call it an epidemic. Maybe it’s a pan demmick there is a slight difference in those definitions we’ve talked about before, look it up, look it up. Maybe it’s a loneliness pandemic around the world. And you know, this technology as much as it brings us together. It also separates us and keeps us apart and a virus We’ll keep us part two. So this is not a small issue, okay, of keeping these lockdowns in place, and they are starting to lift in different places, we got to lift them very carefully. Obviously, there are many, many considerations and precautions, but if you want to kill people and destroy their life, drive them into poverty, okay? Because this has got such an unequal distribution of effects, because people at the lower end of the socio economic ladder, almost never are able to work from home. Yet, people at the higher end that are knowledge workers that are in the information economy, heck, they can just work at home. It’s easy. I mean, like, you know, people ask, well, how’s it affecting me? Well, my life’s hardly changed at all. In fact, some ways I like it better, and I’ll talk about that tomorrow. But for other people, this is misery. This is torture. This is awful. Think about it. It works. has a very uneven effect. And as we continue these quarantines people are being driven into abject poverty, they are falling down the socio economic ladder. And some of you with your rental properties will lose your tenants but you’re going to pick up new tenants that have fallen down the socio economic ladder. And that’s why I’ve always recommended for the past 17 years, the basic bread and butter housing is the best investment because you can catch people just starting out in life that are maybe moving out of the home and it’s their first rental, maybe it’s a move up from an apartment and it’s their second or third rental property. Maybe they’re kind of these lifelong renters, and they’ll rent from you for a long time. Or maybe they are people that used to have a bigger house they rented or a house that they owned, and they’re now out of we saw this during the Great Recession of Same thing is happening now or will happen soon, they’re moving down the economic ladder, they lost their house or they lost their bigger house, and they end up renting from you as they move down the economic ladder. But hopefully, we will not let this go on for too much longer. And people will not be pushed too much further down the socio economic ladder because it is very sad. There’s there’s no question about it, folks. I am a bleeding heart capitalist. Yes, I’m a bleeding heart capitalist. And I think we all need to be that way. That’s the right choice. Okay. Not a bleeding heart liberal because they usually end up with the wrong conclusions. They always seem to be hacking at the weeds, whether rather than the root and putting a bandaid on the problem rather than really solving it. So anyway, that’s that bad news out of China and shows one more reason why you cannot trust the Chinese government. Looks like the death toll is much higher than previously stated. So I’m sure you’ve seen the stories about That I won’t go into it. Now, I want you to a couple other things I want to make before we get to our guest today. And we talked about the bailout programs with the the SBA and the paycheck Protection Program, the PPP and the Ei DL, and these these two major programs, and we’ll get to that in a moment. We’ve got a guest on that. But a couple more points. Okay. Number one point I have been doing in a very informal survey, informal research, just anecdotal impressions that I’ve been getting surfing around social media, especially Facebook, and I have, of course, a zillion real estate investor friends, and I am in many, many different groups, mastermind groups with many, many, many real estate investors, okay, like, nine out of 10 of my friends are real estate investors and that doesn’t mean just you listening that means other people that are doing different things and Real Estate than then you might be doing okay. And I have been amazed I don’t think I’ve shared this with you yet but I have been absolutely amazed. Since the real significant impact started hitting since the stock market first initially crashed. Since the lockdowns started. I have been amazed all along and I haven’t really shared this because I’ve been monitoring it. I wanted to just let it go a little longer. And I gotta tell you, my impression has not changed from what I’m about to tell you. But I am actually, you know, I’m not I would kind of consider myself an optimistic complainer. How do you like that? I’m an optimist, but I’m also a complainer. Okay, or complainer. And so I see you know, I try to look I’m a Libra. Okay, the sign the only astrological sign that is not represented by an animal. My sign is represented by a square And 8% of you listening are probably leaders too, right? So, you know, we’re considered to be the balanced people that can really see both sides of an issue. And, you know, we make excellent judges. By the way, when I was growing up as a kid, I used to watch courtroom dramas even as at a very young age, and I always wanted to be either a lawyer or a judge, really a judge because I think I could do a really good job at that. But anyway, didn’t go that route. And I try to see both sides of an issue as much as I can. Okay, of course, I’m human, I have my own biases, just like everybody else. But I have been amazed really, truly amazed and I didn’t think it would be this way. Okay. Just my anecdotal survey my impression from looking at social media and talking with a zillion people. I’m amazed at how optimistic real estate investors are. I mean, it’s like, as soon as this happened, I started reading post after Post and having conversation after conversation with people, you know, meeting on zoom with different mastermind groups that I’m involved in, and they’re just optimistic. It’s like, yeah, game on, we’re gonna keep on buying, you know, okay, if my tenants don’t pay for a month or two, so what, you know, maybe I’ll take take up my my lender and get a forbearance which everybody can get, basically. And, you know, maybe I’ll do that, or maybe I’ll just keep paying my mortgage. And, you know, just keep on buying right into the storm. You know, no, there’s like, no level of fear whatsoever. I did not think it would be this way. By the way, you know, I approached it personally with some level of trepidation. And I think you can definitely hear if you listen to my episodes the past month, I mean, there’s, there’s a good amount of negativity in there. Okay. I think there’s always an opportunity. There’s always a way to make money. You got to just adapt your strategy, you know, you can’t just keep doing the same thing when the climate changes when the sea changes, you know, I’m a sailor, right? And for 13 years, I was a member of a Sailing Club in Newport Beach, California. And, you know, I used to love sailing. I used to take sailboats out all the time. And one of my favorite quotes and forgive me, I don’t remember who, who said this, but it’s a famous quote, and it goes something like, tis the set of the sales and not the gales that determine the direction of the ship. Okay? And what that means is that, you know, you can sail in any wind, you can go whatever direction you want, no matter which way the wind is blowing, you’ve got to have some wind. Now, if you don’t have any wind, you end up in what sailors call and it’s not really just not having wind, it’s not setting your sales right either. But you sailors are going to check me on this and see if I know what the hell I’m talking about. I know we are know you’re doing that you’re gonna you could end up in what they call you end up in iron. Okay? And that probably came from the pirate days when you know people are shackled and irons, right? You end up in irons where you’re not moving, okay? Because your sales have just lost the wind, and it’s not a good situation. But as long as wind is blowing in any direction, you can go whatever direction you want in a sailboat. Okay, you can go right into the wind by tacking, okay, tacking back and forth. It’s a little slower, but you still get there. So the point is, you have to adapt your strategy always. And we’ve outlined a way already for you to adapt your strategy. And I’ve talked about the mass migration that will start and by the way, yesterday, I got a great interview coming up for you next week. I interviewed the CEO of element or as a Douglas, Elliman anyway, the biggest real estate company in New York City, and they’ve got offices in many other places. Well, Dottie was on my show. She was awesome. I just finished that interview yesterday. We’ll put it up next week. And I tell you, if you want to hear it from the horse’s mouth of a big city real estate broker, okay with, I don’t know how many agents probably thousands of real estate agents, she says people are going to flee New York City. Now saying that is severely against her own self interest. So that interview will be coming up next week. You won’t believe it, but it corroborates the strategy I’ve been outlining for you and learn more at pandemic investing calm, which by the way, we’re going to update the content there. That’s I’m gonna say it’s really old content because it’s from three weeks ago. So much has changed. So I want you to think about that. Number one, the optimism of real estate investors really amazing the path we’ve laid out for you. Okay, the other thing I want to talk to you about more we don’t have time today because we’ve got to get to our guest. The idea and this is an interesting idea, another way that they are transferring wealth, okay, we want to always watch out for what the elites are doing and how they’re transferring wealth. And one way is transferring wealth between the generations. So just think about this, and we’ll talk more about it later. You have these artificially low interest rates that we’ve had for many years now, financial repression, you force older people with savings to you force them into more risky investments. And many of these investments are securitized by debt. And if you need more debt to create more securities, what do you do you ensure one of the biggest debt problems in debt bubbles here right is student loan debt. You ensure student loan debt through the government. So all the universities raise the prices to ridiculous levels total scam, we all know that complete ripoff and then you have another investment product for older people, baby Baby Boomers and the generation even before them, okay the silent generation, the GI generation, whatever. They invest in those securitize debt instruments. And so basically what you do is you sell the future you ruin the future for the younger people, but you kind of have to do it because you need a securitized debt product for the older people with savings to invest in because they can’t just put their money in the bank anymore because of financial repression, total scam. The other thought I want to leave you with before we get to our guest is just remind you of what I said the other day about how so much inflation is baked into the cake, not by fiscal and monetary policy, but by venture capital and Bs IPOs and the way the public markets work. We have funded the zombie companies with ridiculous levels of funding, whether they be Uber Airbnb, we work these companies are good ideas, but They’re a joke the way they’re managed financially and the way they’re funded. It’s a total freaking joke, okay? It’s a scam. And these companies, they need to make money someday or they’re not going to be here anymore. They’re basically surviving on just new funding all the time, which is not how you run a business. Remember my quote, real businesses make profits. My business is a vastly superior business, because it always makes a profit to any of these big giant companies that are just cash holes that you just dump cash into. It’s like owning a boat. It’s a hole in the water, you dump money into, right? I owned about 48 foot boat, hole in the water you throw money into, okay, that’s what it is. And that’s what these companies are. They’re the same thing. So guess what, that is an inflationary force. That equals inflation, okay, because it’s baked in, because these companies will have to raise their prices to start making money. That means prices go up, and that is inflation. Okay, so just think about that. Those are some new ideas. I haven’t heard them anywhere else. They came out of my own head. And they’re interesting. Think about them, okay, hey, I gotta stop talking. We’ve got to get to our guests. And so let’s talk about the bailout programs. And make sure you avail yourself of these programs and probably want to get in line now if you didn’t get in already, because that next round of funding is on its way. Here we go with our guests. It’s my pleasure to welcome Jessica ma she is founder of in dinero. And they help small businesses with a variety of financial issues, from bookkeeping services to tax prep to virtual CFO services, and we are here to talk today about the SBA bailout programs. What’s left what might be coming. She is the founder of this company. They are distributed with about 300 people on their team. She has been featured in Forbes and Inc magazine’s 30 under 30. List. Jessica, welcome. How are you?

Jessica Mah 20:06
Wonderful. Thanks so much for having me.

Jason Hartman 20:08
And you’re coming to us from my hometown, Los Angeles, California, right?

Jessica Mah 20:12
That’s right, excellent.

Jason Hartman 20:14
Well, we are all quarantined up here and there, the government and the Federal Reserve are printing money like crazy to bail everybody out. And there’s a lot of confusion around these programs. There are two basic programs, the PPP, and the Ei DL, we’ll jump into this. You’ve given a lot of webinars and presentations on this. And we just heard that PPP the paycheck Protection Program has run out, but we don’t think that’s for very long. It’s going to come back or some other program will come back. Jessica, why don’t you address that? Maybe first, and then let’s dive into the details of these programs.

Jessica Mah 20:56
Absolutely. Yeah. Well, first off, thanks for having me and To everyone out there who has a business and who is, you know, going through challenges with COVID. You know, sending you all a lot of love here because, yes, a challenging time and I know many of us have applied for PPP and EDL and some of the other government bailout programs out there and are wondering, will there be more funding to come in to enable us to get funded, right, because I think there are reports that have said that only 6% of all applications have actually been approved by the SBA and funded and I believe that number is pretty close to accurate. We have over 1000 customers that in the narrow have filed PPP ideal loan applications for the majority of them and we have seen less than 10% get approved. With that said, I strongly believe that we will get more funding and there I highly encourage all business owners to apply and get back in line. So, you know, have a shot of actually receiving the funds. Okay, so maybe the first thing to say here about this is is the best source to simply just go to your bank where you bank now, where your where your business banking account is, and just apply with them. I mean, there are brokers there are different sources, but it seems like just use your the bank you bank with already right is that sort of the best way to go? That’s what the SBA is saying. However, that is not necessarily the best advice if you want to increase your probability of getting alone. The people who I know who had the most success getting a loan have gone with smaller regional banks. And I have friends who have bank accounts that say chase or Wells Fargo

Jason Hartman 22:53
terrible banks they’re chasing bearable Chase and Wells Fargo, they both suck. In you know, so to be a bay, so we got a mall. And in Citibank, Citibank it’s really unfortunate

Jessica Mah 23:07
because of all of our customers that chiefs none of them got funding however, we’re willing to file applications through smaller regional banks, banks that you probably have never heard of and they they got the loan through the smaller bank even though they applied the same day with Chase and with those other banks.

Jason Hartman 23:25
So that is my advice. Are you saying that even though they didn’t have a relationship with they didn’t have an account with that smaller regional bank, they just knocked on their doors a stranger and said, Wow, that’s just bad. That’s absolutely ridiculous. I

Jessica Mah 23:38
know, people who apply that five banks because they were stuck at Wells Fargo and then they added four small regional banks, and then they get approval to them. So the problem is that in order for the bank to submit your application to the SBA, they have to go through their own internal review process, and they have to internally approve your own your loan application before they’re allowed to submit it. To the SBA, but the bigger banks is just going to be more bureaucracy. Wow. Yeah. It’s just shows you what a fiasco is these big banks are awful. And of course, they just get a bunch of government bailouts and, and we all pay for it. It’s absolutely pathetic. But that’s good to know about the regional banks. That’s great. What about brokers? Have any of your clients used brokers? I don’t really think brokers are going to add a lot of value here. I think that you could knock on the door for the smaller banks, if you have a lot of deposit money. Like if you have seven figure deposit, you’re willing to move to a smaller regional bank,

Jason Hartman 24:36
they’ll probably love you. Yeah,

Jessica Mah 24:37
they will exploit your application. And likewise, for folks with, you know, seven figure deposits, who need help, feel free to, you know, send us an email and we have relationships with some of these banks, and we can, you know, try to make sure that you’re buttoned up and your loan actually gets processed,

Jason Hartman 24:55
okay, so even though PPP is out of Money Now, can you still apply? I would bank your application.

Jessica Mah 25:06
I mean, absolutely well,

Jason Hartman 25:08
and because they think like we do that there’s just more money coming.

Jessica Mah 25:12
Right, exactly. And they also don’t want the bad press of saying, Oh, yeah, we’re just putting it on hold. And then if it comes back alive, all the other banks have been working on internally processing applications. And then they’re going to get ahead of line right so every bank is accepting PPP and ideal applications even though both programs are currently on hold due to running out of money.

Jason Hartman 25:36
Yeah, wow. Oh, so he ideal is also out of money.

Jessica Mah 25:39
EDL is also added as of today.

Jason Hartman 25:43
Wow. What a government fiasco This is no, so we need a few more trillion dollars and that might not even be enough either. Okay. Well, look, you know, we’re all pretty much pardon the pun banking or On the idea that these programs are going to be refunded I am I have no doubt that they will. The government action and Federal Reserve action has been swift and bold. I mean, there is no reluctance whatsoever. If the powers that be on bailouts, you know, it’s not even like they’re thinking about it, giving it a second thought, Hey, there may be consequences. They may create tons of inflation later, it they’re just printing money like crazy and dumping money into the system. They’re flooding the system with money. So a lot more is coming. I don’t think there’s really any doubt about that. So we might as well dive into this topic. And let’s talk about what’s available and how to be successful in getting your slice of the bailout pie. adjusts. It’s, it’s all yours.

Jessica Mah 26:50
Awesome. Well, again, like really hopeful that all this comes back into action. And I think some of the most important advice here is To fill out the application and work with your accountant or whoever your financial advisor is for your business to make sure that everything’s accurate, but I would just get that into the bank today. It doesn’t need to be perfect. I think ultimately, you’re going to be able to adjust the amounts. And what I’ve seen is that the SBA, they’re not really checking the master, just trusting the banks. And if you have a good relationship with your banker, whoever that person is at your bank, they are going to get this loan application process. The other advice is to show your work. Think of the PPP and IE ideal applications, kind of like you’re doing your math homework when you’re in school. The teacher says show exactly how you came up with the answer. And so what we’ve been doing for our customers and I really hope other accountants are doing this for their customers have an Excel workbook that shows the total numbers for how you use them. Everything. So right now, I’m just gonna scroll through my presentation here.

Jason Hartman 28:06
And by the way, if you’re only listening to the audio, this will also be on our YouTube channel. So you can see the images that we’re referring to. And there are some slides here, as well. But you don’t necessarily need to rush to YouTube to see it, I think will explain it pretty well. But sometimes, yeah, visually is very helpful.

Jessica Mah 28:27
Yeah, I’m just gonna, I’ll stay with the most important points here. And then we’ll share all the information later. So you could download it on your own, I wouldn’t be worried about doing the visual right now. Okay. And I also know that by this point, most of us know the high level details. I think what I’m going to try to communicate here is really just how to make sure you’re dotting your i’s and crossing your T’s and increasing your probability of getting accepted. And as you know, the PPP program will give you 2.5 times your average monthly payroll Up to $10 million. And for us employees, it’s going to be capped at $100,000. And so when I say show your work have a workbook, what we’ve been doing is not just showing the total payroll, but really showing all of the payroll and then all the payroll minus the money spent over 100 k in salary. You’d have to take out contractors in the early days, people thought you could include contractors right as part of payroll, you cannot include contract and

Jason Hartman 29:32
that really bummed me out because I was going to apply for my share of the bailout pie. Because we have mostly contractors in my companies, and I was sad to learn that I won’t qualify,

Jessica Mah 29:48
but the contractors will be able to apply and last Friday, they open it up of course, I don’t think any contractors got any PPP money because they ran out of money so quickly, but My suggestion is if you run a company that has mostly contractors, give them this education, encourage all of them to get their own PPP applications in, because then that’s going to enable you to negotiate better rates to pay them if you’re going through a crunch on your own.

Jason Hartman 30:17
Right. How much time does it take to, you know, get through the weeds here and apply? I mean, it depends how many banks you go to, it depends on a lot of stuff. But how difficult is the application process?

Jessica Mah 30:32
The application is so easy initial application, it’s one page. And it basically just asked for your name, your address and who owns the company and, and you know, it’s so easy. I’ll take you no more than 20 minutes to fill out. The problem is once you submit it, you’re being asked for supporting information, potentially. And since we have so many customers from so many different banks, There’s no set process. Every bank has a different set of materials they’re looking for, like many banks are looking for this workbook. And when you submit the initial application, they don’t necessarily tell you what they’re going to need from you. So my other advice is, email your bank and say, what other supporting information will I need? In order for this to get internal approval and to be formally submitted to the SBA? That’s the magic question that I really want everyone here to ask. All right, be safe.

Jason Hartman 31:31
Save out a magic question again, let’s make sure people caught that.

Jessica Mah 31:34
So the magic question, what is all the information you need from me in order for the bank to formally process my loan application and submit it to the SBA? Okay, and so they’re gonna come back and say things like, Alright, we’re gonna want to see your 2018 tax return, forgetting to want to see your Excel spreadsheet that shows How you calculate the 2.5 times average monthly payroll? Did he include contractors? Or did he not include contractors in that number? They want to know if you’re fudging your numbers if you’re exaggerating your numbers. If you’re including things that PPP says you’re not allowed include, and this is something that’s really you’re really best off having your payroll company or accountant help put together but you want also anticipate what are all the other things they might ask for? As early as possible. So you could send that to your advisors to get get started working on.

Jason Hartman 32:32
Okay, and when you when you say advisors, do you mean the loan officer at the bank?

Jessica Mah 32:36
No, I really mean your accountants and your tax advisers and your your payroll putting

Jason Hartman 32:41
the package together.

Jessica Mah 32:43
Yeah, exactly. Okay. All the materials, because a lot of people they lose precious time they submit the application. The banks are super overwhelmed by the time they get your email. It’s like four days later, and then they send your request of all the things they need. Yeah, but that’s for He could have been working on preparing the information already. Right? Okay. That’s the number one reason why I’m seeing that companies who are less prepared, who aren’t proactive. Those are the ones who are not getting the PPP loans. So So yeah, I hope I hope this is really helpful kind of inside what I’ve seen.

Jason Hartman 33:20
Okay. Go ahead and cover more information on your slides now.

Jessica Mah 33:24
Yeah, sure. So a little bit on the details here. So the SBA has changed a lot of these numbers through the past two weeks, you know, at first, the interest amount was a few percentage, then I dropped a half percentage. Now, they’ve settled on it being a 1% interest loan, and at first, they would give you 10 years to repay. Now, that number is only two years, so it’s a 1% interest loan, two years, and all of it will be forgiven as long as you spend 75% Have it on payroll, or the vast majority are on payroll and then no more than 25% on rent. And on other things. There’s a list on the internet that lists out all the things you could spend that on. But think about it from the government’s perspective, they want most of this to be spent on employees and keeping working

Jason Hartman 34:19
right now. Yeah,

Jessica Mah 34:20
exactly, exactly. And so to that extent, what you’re going to do once you get approved, and I want to say once you get approved, because I really believe that they’re going to try to get most of you guys approved here, you’re going to set up your own separate bank account, I call it the PPP bank account. And you want to make sure there’s a paper trail to show that you’re following these rules, where most of the money’s going to payroll. And so I’d go to my payroll company and change it so that all the payroll is spent from that new PPP bank account, because if you don’t have this buttoned up, you might have problems having the loan forgiven at the end,

Jason Hartman 34:57
okay, now I can’t you know, I just Nobody knows yet but i just envision really a total mess in the loan forgiveness aspect at the end. Right. So these are, are they really just basically grants? I mean, there are loans, that it’s not really alone if you don’t have to repay it, it’s a grant, okay? You’re they’re just giving you the money. But you might have to repay it. The government is saying if you don’t spend it properly, is that is that how it works?

Jessica Mah 35:29
Yeah, if you don’t spend it properly. And then also there are rules around what the total headcount of your company is. So if you lead off employees because of COVID. And if your payroll spend this year is lower than your payroll spend pre COVID, then there will be less money for given. The idea is that with this money, you’re going to rehire any of the people that you’ve laid off or furloughed, and to the extent that you don’t do that less of this money will be forgiven.

Jason Hartman 36:02
I just imagine them not checking that or accounting for that very well, I will make a prediction here. Maybe I’ll be wrong. But I bet a whole bunch of companies won’t spend the money properly. They will lay people off, and they’ll still get their loan forgiven somehow or another, but maybe not. You know, don’t make on that, by the way, folks. Don’t bank on that. Yeah. It’s just a prediction, because government programs are a mess. Always. Right. So

Jessica Mah 36:32
data will probably go after bigger companies, though. And we can example.

Jason Hartman 36:37
The big players. Yes, the little ones. They won’t have time for the small fish. But But anyway, again, again, I’m not recommending that. I’m just saying that my prediction is a lot of bad apples will end up with grants, and we’re all going to pay for it through either taxes or inflation, one or the other. That’s the only way the government can pay for things those two ways right? Okay, go ahead. Yep.

Jessica Mah 37:01
Yeah. So I’d say you just want to start thinking about I would at this point still assume, though, that the PPP approval process is going to be at least another week or two before Congress gets their act in order, if not longer. From the time you submit this to the time that it gets processed and submitted to the SBA by a small regional bank, the average we’re seeing is about four or five business days. And then from that point, it’s usually pretty quick once you’ve been formally approved by the SBA, it’s about another three or four business days before you get final paperwork. And in most cases, the paperwork is non negotiable. It’s kind of teacher Leave it, you sign that and then the bank will fund you the next business day. So to that extent, you really want to be careful this next month, you could furlough and lay people off a big popular question I get is, well what if I need to lay people off because PPP money is not available yet? Well, this TV crease the for drivable portion and the answer to that is actually you’re allowed to leave them off now and then once you get the loan, you can rehire them back and unfollow them and still be able to take advantage of the forgivable aspect of the loan. But I would not wait. I would if your business cannot stay sustainable, you need to make those changes and cuts today and that will be okay acquiring a PPP.

Jason Hartman 38:25
Yeah, you know, this is just such a whole sad mess we’re in people are these activities of dealing with the SBA, dealing with the bank, horsing around furloughing, or laying people off and rehiring them. None of this is productive activity. None of it. This is not what an economist wants people doing. We want people growing their business. And here we’re all just now messing around with paperwork. You know, it’s, it’s just really a bummer, but it is what it is. So let’s get through it. Together folks.

Jessica Mah 39:00
Exactly. And I would also encourage you guys to think about applying for both PPP and Ei dl because companies are allowed to participate in multiple programs. With that said, PPP is really your best bet here. I mean, I think the EDL programs just not gonna do as much here and I’ve heard of people getting $10,000 forgivable advances. But as far as that really helping out, I mean, TPP is really what you’re going to be focused on if you have a lot of payroll that you’re going to need cover.

Jason Hartman 39:33
So of the two programs for PPP is the one that people should most likely pay attention to. Right,

Jessica Mah 39:41
exactly. Because if you’re gonna get PPP, I mean, there’s some you can’t really overlap here. Like you don’t want to pay for the same expenses twice through one program and other program. You really have to treat it as this the ideal program. If you Get EDL that’s covering stuff that PPP won’t cover. So to that extent, you want to just get a PPP and also want to expand PPP and di DL, it’s going to happen at the same time, if PPP is out the ideals probably out as well. So just keep that in mind. Okay, I think we’ve covered the most important elements here. What I also want to mention is that a lot of these smaller regional banks, they say every bank says we have to focus on our existing customers. And that is correct. With that said, as we discussed earlier, the smaller banks, they want new customers, they want new deposits, they want to help people who are getting screwed by the big mega banks. So I wouldn’t be shy about moving around and putting in two or three applications. I don’t think anyone’s No, no,

Jason Hartman 40:48
you know, I’ve heard mixed answers on that multiple applications thing. I have heard from sum and this is probably pretty important that if you put in more than one application It could be triggered as though it might be fraudulent in the system. And you might get both denied or delayed, you’re really saying put in more than one application now. Hmm, is that the experience you’re finding works the best.

Jessica Mah 41:15
I’m saying the folks who put in multiple applications are more likely to get approved. If you look at the actual metrics and data I’m looking at. Mm hmm. And keep in mind, what is it that you’re really focused on, you’re focused on the bank, getting through their internal application process the fastest and then having that submitted to the SBA as quickly as possible and so that gets you towards the front of the line. Whereas with the bigger banks, you’re just gonna be way further back in line you know, for that that thing so that’s that’s why I really stand by this advice and this is all super controversial debatable, all this

Jason Hartman 41:55
new territory totally new. Yeah, everybody’s It’s so confusing what’s going on. Right? No, it’s a big fiasco. Okay, Jessica? Well, good. This is great information. We did talk about the loan application process sort of at the beginning. So that’s great. Please give out your website and tell people where they can find your company and find out more about these programs.

Jessica Mah 42:15
Yeah, absolutely. So we’re publishing information on this. All the [email protected] dinero. Calm, and feel free to email us. We’re happy to answer your questions. We’re not charging for answering questions. We just want to help other businesses out who did at in dinero.com. Feel free to just let us know what you’re struggling with or what you’re curious about and, and well, we’ll get someone on our team to help you out.

Jason Hartman 42:40
Jessica, thanks for joining us.

Jessica Mah 42:42
Thank you for having me.

Jason Hartman 42:48
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