PPP and Beyond

By: Mike Doss, Round Rock Chamber Board of Directors

Round Rock’s business community has been part of the bedrock of our community for decades, driving economic growth, job creation, quality of life, support for our school district, and philanthropic support. But then, along comes 2020 and a new phenomenon called COVID-19 that has caused all sorts of changes in our lives.  Yet, as always, our faith and the Round Rock community spirit that lies within helps us keep enduring.

That community spirit has shown itself in a variety of ways lately.  For example, Wilco Forward is a county initiative (approved by Commissioner’s Court and spearheaded by County Treasurer Scott Heselmeyer) to provide a $25 million allocation of federal funds in the form of grants for ailing local businesses.  Also, Round Rock Cares was a local grass roots effort that provided over $450K to struggling local businesses.

Over the past two months, the letters PPP have entered our conversation. The Paycheck Protection Program was part of the CARES Act and local banks rallied to participate in this program to help out our business community.  Many of you have received PPP funds, and if you haven’t, as of now it isn’t too late. The urgent need demanded a quick program rollout, which has led to a lack of clarity for both banker and borrower, but ultimately, the first PPP round saw $349 billion flow to small businesses, largely through community banks.  There is another $310 billion on the way and being funded now.  $659 billion approved and funded in a matter of weeks is a huge accomplishment. Locally, I’m proud to say that our bank (Independent Bank) has provided over $120 million of PPP funding to over 750 customers during this difficult time and that 100% of our clients that applied have gotten funding. Due to the relationship we have built with our customers, they had someone to call and ask questions of and we were able to respond to high demand. Getting a heartfelt thank you note from a customer for helping them in a time of dire need certainly keeps you coming back to help and serve others.

Now that the funding of the PPP is largely complete, many of you are wondering about how the forgiveness of these loans will happen.  Understand that you and your banker are like minded in wanting all of the loan(s) forgiven, so work with them to accomplish that. As of the time I am writing this, the SBA has yet to provide clear guidance on the details for the forgiveness, so we are together in waiting for details. Writ Baese of Hill Country Payroll put out this great resource to guide you for the time being.

In short, the program was built to provide you with funds to retain and rehire your employees, so meticulously track your payroll for the eight weeks following when you received the funds – 75% of the PPP funds must be used for payroll expenses. You will need to provide your 941 reports, as well as reporting on what you spent for other payroll related items like health insurance, retirement plan contributions, etc. Also, up to 25% of your PPP funds can be used to cover utilities and rent payments so keep track of those items. As we await clarity on the SBA details, communicate with your banker during the process as you both want the same thing…100% loan forgiveness.

Lastly, I wanted to address the economy and the state of some of our businesses. Due to shelter in place and other government mandates to help combat COVID-19, many businesses and real estate projects are not doing well and may struggle for a while. Here are a few thoughts on this:

• Stay current with your payments.
• Stay in communication with your banker (and if you don’t have much of a relationship with your banker, think about changing that). Bankers don’t like negative surprises and one of the worst things a client can do is to go dark on the bank when times get tough.
• Let your banker know when you are struggling so they can assess and possibly provide relief options in coordination with your efforts. Tough times don’t last, but tough people and strong relationships do.
• Work with your banker to devise a plan. Share with them what you are doing to make things work and help them tell your story.

These past few weeks have been a whirlwind for all of us, but I’ve been reminded of what a great community we live in.  A community that cares and comes together.  While the PPP work has been a new thing for all of us, as a community banker it has been rewarding to help people in a time of need.  Keep your faith, keep your optimism, keep enduring, keep persevering, and keep communicating.

Best wishes to you and your family,

Mike Doss
EVP – Independent Financial
Round Rock Chamber Board of Directors and Past Chair