Moving to New Mexico

A recent Wall Street Journal article raises the questions, where do you want to live, and why? As work life shifts to remote models, the need to live near hot job markets is challenged. People are reassessing living situations and moving to places that make them happy, both for improved quality of life and ability to save money.

“At one point in April people were relocating at twice the normal pace, according to data from Cuebiq,” writes Ben Eisen.

If you are among the many people seeking a change of scene, consider New Mexico! Beautiful mountains, fresh air, and stunning skyscapes (not to mention strong economic incentives) could be calling you home.

Albuquerque was recently ranked America’s ninth most affordable city by Move.org. The city’s low cost of living contributes to its also being ranked one of the top five cities in which to build wealth by pay experts Salary.com.

Albuquerque also ranks in the top ten large-size metro areas in the country for economic development potential, according to site selector publication Business Facilities. “‘Albuquerque has a foothold in very high-tech industries,’ including renewable energies, photonics, and information technology,’ said Business Facilities’ Editor in Chief Jack Rogers. ‘We think the up arrow is going to stay for a while.

Santa Fe was voted one of the Best Small Cities in the U.S. in Conde Nast Traveler’s Readers’ Choice Awards last year. “There is a lot of sameness in cities around the world,” says Santa Fe mayor Alan Webber. “We remain unique.”

Learn about opportunities to own a business in beautiful New Mexico. We’re here to help!

 

 

 

 

New PPP Guidelines and Deadlines

The New Mexico Economic Development Department released this statement today concerning new guidelines and deadlines for Paycheck Protection Program loans:
Economic Development Cabinet Secretary Alicia J. Keyes announced that new forgiveness and flexibility rules for the federal government’s Paycheck Protection Program (PPP) will benefit more New Mexico businesses and she is urging those who have not yet applied to take another look at the program.
With the PPP deadline for loan funding on June 30, there are just a few days left for businesses still interested to receive funding from private lenders who are partnering with the U.S. Small Business Administration (SBA).
As of this week, there is $129 billion left for PPP lending. The new forgiveness guidelines were presented by SBA leaders in New Mexico as part of an EDD webinar on June 17.
With the new PPP Flexibility Act, signed into law by President Trump on June 5, many more businesses in New Mexico who apply for forgiveness should be able to receive it. That means more of the money going to New Mexico businesses will stay in the state and not have to be repaid.
“The new guidelines mean that New Mexico businesses can reopen at their own pace and work toward a safer, stronger recovery,” Cabinet Secretary Keyes said. “The businesses can take more time to prepare and have until the end of the year hire back employees. The changes are a good thing for many small businesses in the state that are still under some health restrictions. I urge businesses who have not yet applied for PPP to take another look at this program before it closes for good on June 30.”
The biggest change allows PPP loan recipients until Dec. 31, 2020 to restore the employee headcount to pre-pandemic levels. The provision does not require hiring back a specific worker, just reaching the same headcount pre-pandemic in order to qualify for some loan forgiveness.
The new rules also reduce the percentage of PPP dollars required to be spent on payroll — to 60 percent from 75 percent. That change is particularly beneficial to galleries and specialty retailers with few employees but higher overhead in other areas such as rent, utilities, and mortgage interest.
The term for new loans is also extended from two to five years for any repayment amounts that would be due back to the lender, and the time period to use PPP money has been extended from 8 to 24 weeks.
“Small businesses are breathing a sigh of relief that they now have more time to bring back employees,” John Garcia, New Mexico SBA District Director, said on the EDD webinar.
“The changes are really important for hospitality businesses, gyms, and restaurants — many of the businesses that are still under COVID-19 restrictions,” Russell Wyrick, Executive State Director of the Small Business Development Center (SBDC) Network, said.
The SBDC centers provide guidance and technical assistance for all SBA loan services and applications in New Mexico. For more information, go to nmsbdc.org.
The SBA also reopened its application portal for the Economic Injury Disaster Loan Program (EIDL), a low-interest loan up to $2 million with payback periods of 20 to 30 years.
Wyrick emphasized on the webinar there are several other SBA loan options that might work for specific circumstances and his experts are available to advise business owners and nonprofit managers at no charge.
“The new guidance for PPP loan forgiveness is a welcomed action by the SBA. Many borrowers and lenders in New Mexico have been seeking clarification and a simplified process for asking for the intended forgiveness,” Jerry C. Walker, President & CEO Independent Community Bankers Association of New Mexico, said. “This is a positive action which moves us in that direction. Taken together, these actions benefit New Mexico’s small businesses who have been recipients of PPP loans.”
Some 650 New Mexico banks, credit unions, and community lenders have been active in SBA lending over the past several months with $2.2 billion in PPP money going to 20,431 New Mexico businesses and non-profits. Nationwide, $511 billion has been distributed under PPP.
The June 30 deadline for the program is fast approaching. “People often like to wait until the last minute,” Wyrick said on the EDD webinar. “Well, this is the last minute.”
For information on PPP and all the SBA loan programs go to SBA.GOV
For information on the state assistance, including the COVID-19 Loan Guarantee Program and the No-interest LEDA loan program, go to the EDD website, GONM.BIZ
For technical help and advice on SBA programs and loan applications go to NMSBDC.org.
For a list of SBA lending partners go here.
For comprehensive information from the State of New Mexico on the COVID-19 health emergency, including data, testing, economic, and food assistance, go to NEWMEXICO.GOV.

Scenario Planning for Pandemic Outcomes

“Significant uncertainty surrounds what the ‘new normal’ could look like for firms beyond the COVID-19 crisis. But scenario thinking can help organizations better anticipate and adapt to dramatic changes, increase agility and resilience, and turn uncertainty into advantage,” according to this Knowledge@Whatron article.

Scenario planning is a powerful tool for developing strategy, especially given the complex web of unknowns in which we find ourselves. It leverages the cognitive, creative power of narrative to imagine and respond to possible futures. The thought experiment yields critical analysis, important insights, and the ability to innovate and prepare for a variety of eventualities.

For scenario planning to be as useful as possible, entire teams should be engaged and invested. If delegated to a small group as a fringe project, the resultant lessons will have diminished impact, cautions this piece by business consultancy McKinsey. The exercise works best when the narratives around each scenario are all deeply developed. The more information and connections a scenario involves, the more instructive its consideration will be.

Scenarios should represent a spectrum of good and bad situations. You can think of them as laying over a graph in which the x and y axes represent best and worst case predictions for key factors. For example, take economic recovery (weak to strong) and social/consumer behavior (scared to confident). Scenarios in that case might occupy quadrants such as “struggling economy and consumers are staying home,” “economy is picking up but consumers are avoiding public spaces,” “economy is still low but people are eager for new consumer experiences,” and “businesses are bouncing back and consumers are venturing out again.” Planning deeply for each scenario allows you to create a playbook and to better recognize patterns on the horizon. This Forbes piece outlines a step-by-step guide for applying scenario planning to your business.

One of the most useful and most challenging aspects of scenario planning is thinking beyond your own expectations in order to plan more comprehensively. McKinsey shares this advice (summed up concisely in this infographic) for navigating the perils of bias.

 

 

Opportunity: Sign of the Pampered Maiden

Sign of the Pampered Maiden in Santa Fe for SaleSign of the Pampered Maiden is an iconic, enduring brand and luxury fashion destination in the heart of downtown Santa Fe, and it could be yours. A dramatically reduced price and supportive SBA programs make this a perfect opportunity to become part of the Santa Fe retail and fashion identity.

Now listed at only $180,000, Pampered Maiden’s 2019 gross revenue was $615,266, with a cash flow of $74,417. Find more information about this exceptional opportunity here.

Pampered Maiden’s collection of organic, eco-sensitive and locally-sourced clothing has won it a loyal customer base. The classic sensibility and emphasis on quality has attracted women of multiple generations. Visitors and locals alike have made a regular habit of shopping at Pampered Maiden to seasonally refresh their wardrobe.

The shop’s reputation for customer service also sets it apart. Staff is skilled at providing a personalized shopping experience and expert at visual merchandising. Santa Feans consistently rank Pampered Maiden as one of the top stores for women’s clothing, jewelry, fashion accessories, and gifts. It has been featured in the pages of The Santa Fe Guide, The Essential Guide, Trend Magazine, In-Art Design Magazine, and other local publications.

Additionally, the current owner has invested in upgrading Sign of the Pampered Maiden’s online presence. A newly updated e-commerce site and enhanced social media are important adaptations and bring the brand great sustainability and growth potential.

To help secure a smooth transition, the Seller will make personal introductions between vendors and new owners. If desired, she will accompany new owners on the initial trade shows and major buying trips. A top-notch staff also helps make this business easy to operate.

 

 

 

 

Resource Roundup – PPP Loan Forgiveness Updates

The United States Chamber of Commerce has shared the following updates on PPP loan forgiveness amidst some confusion on the subject.

For employers whose employees have chosen not to return to work, the Treasury Department has clarified its position on loan forgiveness. Specifically, if you’re an employer and want to bring an employee back who had previously been laid off, you will not be penalized if the employee chooses not to return. If you issue a written invitation to invite the employee back to work and the employee declines your written offer, you will not be penalized in PPP loan forgiveness application.

There is still PPP loan money available and businesses should continue to apply.

It is not known yet whether the window for loan use and forgiveness will be expanded beyond June 30, 2020, or if terms will be extended to more non-payroll expenses. While some of these rules could change, businesses are advised to assume the current program guidelines will not change.

 

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

De Facto Disruption and True Transformation

A Harvard Business Review article titled To See the Future of Competition, Look at Netflix resonates strongly just now. “As more and more of us turn to Netflix for entertainment, the company bears watching as a source of insights about the future of business and work,” writes author Bill Taylor. That seems to apply in the time of quarantine even more than when he wrote it. As the inventor of “binge watching,” Netflix has likely played a larger than usual role in many lives lately.

“Netflix could be the dictionary definition of a Silicon Valley disruptor, a new entrant that reshaped the logic of an entire industry,” says Taylor. “Yet what’s truly remarkable about the company’s trajectory over the last two decades is how dramatically it has disrupted itself in service of its mission.”

This is a time of de facto disruption, so why not use this moment to reflect intentionally and envision future courses of action that create and apply strategic change, not just forced adaptations?

Netflix regularly updates its manifesto on culture. The statement outlines the values to which people in the company are held to account. Taylor summarizes salient, inspiring points:

“Many companies have value statements,” it begins, “but often these written values are vague and ignored. The real values of a firm are shown by who gets rewarded or let go.” So what kind of people get rewarded at Netflix? “You say what you think, when it’s in the best interest of Netflix, even if it is uncomfortable,” the manifesto says. “You are willing to be critical of the status quo” and “You make tough decisions without agonizing.” Moreover, “You are able to be vulnerable, in search of truth.”

Now, while life and work is disrupted anyway, could be a great time to “hit pause” and ask the tough questions that lead to transformative innovation.

 

 

 

 

 

Resource Roundup – PPP and Business Support 2.0

President Trump signed the legislation today to replenish business relief programs and support hospitals and COVID-19 testing.

The package totals $484 billion and includes:

  • An additional $310 billion in funding for the Paycheck Protection Program (PPP), with $60 billion reserved for small banks and lending institutions
  • $75 billion for hospitals
  • $25 billion to support testing efforts
  • $60 billion for emergency disaster loans and grants (EIDLs)

In a recent virtual town hall hosted by Inc., U.S. Chamber of CommerceExecutive Vice President and Chief Policy Officer Neil Bradley advised applying for this second round if you own a business and need support, despite frustrations shared by many about the first round’s allocations. “I would apply for the loan. If you look at loans already pending, I think the $310 billion is going to go quickly,” he says. “If you get it, great. If you don’t, there might be another tranche. You’re going to want to be in line.”

The funds reserved for smaller lending institutions are just under 20% of the PPP replenishment. It is hoped that portion will prevent more of the stories we’ve been reading in the last week in which large businesses with stronger bank relations were allocated maximum loans while small businesses wait in Limbo.

Credit unions, Community Development Financial Institutions (CDFIs), and FinTech lenders are potentially a good place to start for small businesses, says Michelle Sourie Robinson, President and CEO of the Michigan Minority Supplier Development Council. If you plan to apply through such a lender, be sure to call ahead to make sure the lender has been approved by the SBA to participate. Not all institutions are involved and some that wish to be are still awaiting approval, cautions Bradley.

The EIDL program is a good option for businesses with non-payroll related needs. Unfortunately, with the extremely high demand, Bradley anticipates the grants will remain capped at the recently adjusted rate of $1,000 per employee, as opposed to the original $10,000 per approved business.

If you are concerned about rent (which EIDL money is well suited to cover if you get it), Bridget Wetson, Acting CEO of SCORE, suggests negotiating with landlords. They would likely prefer to deal with current tenants rather than seek new ones, she reasons. Rent reductions, deferrals, or (for retail businesses) switching from base rates to percentage rates may be possible. Be sure to formalize such agreements in writing.

 

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

Resource Roundup – Approval for Second Small Business Funding Package

Congress and the White House have reached an agreement for the second round of funding for business relief programs. Details are forthcoming.

It’s expected that the package will total $450 billion and include:

  • $300 billion for the Small Business Administration’s popular Paycheck Protection Program (PPP)
  • $50 billion for the Economic Injury Disaster Loan (EIDL) program
  • $25 billion for testing
  • $75 billion for hospitals

Notably, $125 billion of the PPP money will be set reserved for small businesses that don’t have strong relationships with local banks. (Hopefully this will address one of the primary problems with the first round.)

The replenishing of the EIDL program is coming sooner than some expected. This program is potentially a good fit for businesses with non-payroll related needs.

Many businesses find themselves in a  Limbo state, having applied for PPP assistance before the first round’s funding was depleted and not having heard if they were approved. The SBA generates a unique loan origination number upon approval.

“If you’ve already gotten that loan origination number from the Small Business Administration or your lender has that, you are part of that [original round of funding] and you should be getting your loan disbursed,” said Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce Neil Bradley said. “The thing to check on is where you are in that approval process.”

Stay tuned for updates!

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

 

Resource Roundup – Independent Contractors and PPP

The Paycheck Protection Program is now open to 1099 workers and independent contractors, of whom there are over 23 million in the U.S.. There has been a lot of confusion around how independent contractors interact with this program, and not a lot of guidance from the SBA or Treasury. In a virtual town hall hosted by Inc., a panel of experts shed some helpful light on this murky area.

Panel:

Kimberly Weisul, Inc. editor-at-large (Moderator)

Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce

Keith Hall, President and CEO of The National Association for the Self-Employed

Sarah Jennings, Principal of Accounting and Outsourced Solutions and Director of Strategic Initiatives and Community Engagement at Maner Costerisan

Tanya Motta, Vice President of Domestic & Global Programs at California Asian Pacific Chamber of Commerce

Bridget Wetson, Acting CEO of SCORE.

Qualifying for PPP loans

Keith Hall is sanguine about qualifications. “You do qualify. It’s going to be a very rare situation that you as a self-employed business owner don’t qualify. If you have a business, you qualify,” he says.

How to calculate a 1099 salary for a PPP loan

Contractors and sole proprietors are eligible for up to $100,000 in annual income, prorated. “Definitionally, payroll is net earnings for self-employment,” said Bradley.

To calculate this, add up all 1099 revenue for 2019 and then divide that by 12 (months) and then multiply that by 2.5 (months).

What to know about defining 1099 payroll and loan forgiveness

PPP loan forgiveness requires that 75% of the amount is going to payroll.  “Your payroll is your net earnings from self-employment,” says Hall. “Say you get a PPP loan for $15,000. By definition, that $15,000 is indeed used for payroll because it goes to your family, helps you buy food, or pay your mortgage. It is my expectation from a practical standpoint that these PPP loans for 1099 people will be forgiven.”

What documents 1099 workers need to apply for PPP loans

Independent contractors currently use  the same form as small businesses to apply for these loans. Where small business employers write in “average payroll,” independent contractors substitute income. “Contractors or the self-employed should use 1099 forms and other tax documents to help them verify these forms,” says Bradley.

Hall points out that your Schedule C form will be hugely helpful in your calculations. Your net earnings will be your payroll, stated on the bottom line of your Schedule C.

Where to apply

Bradley suggests that FinTech lenders may be good sources for independent contractors as banks are prioritizing clients with existing relations and debt. We cover FinTech companies’ recent authorization for PPP lending here. Exercise caution. A good rule of thumb is to never give information to anyone reaching out to you.

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

Resource Roundup – FinTech Joins PPP

It’s fair to say that the Paycheck Protection Program’s launch hasn’t been perfectly smooth. The adjustment period as lenders familiarize themselves with unprecedented terms and the enormous volume of demand created a significant bottleneck. As some experts have warned, banks are prioritizing applicants with whom they have existing relationships. The systems to process all of this didn’t immediately exist.

After weeks of lobbying, FinTech (technology that supports banking and financial services) companies, including PayPal, Intuit, and Square, have been authorized as PPP lenders. Many have also joined the fray as facilitators of the loan application process.

This gives businesses some new options, which might be helpful if your bank is balking. In a letter to lawmakers last month, an alliance of FinTech leaders called Financial Innovation Now outlined the capabilities of their industry. Specifically, digital payroll records, analysis, and delivery systems help remove friction, they say.

“Collectively, FIN member companies alone have a direct deposit and underwriting capability with over 20 million small businesses. FIN estimates that our companies could rapidly disburse approximately $100 billion in capital to vulnerable small businesses, in many cases within weeks. Through payment processing data and other technologies, these alternative online lenders have direct visibility into real-time hardship of a small businesses and they have the credit models and the digital infrastructure to move money rapidly.”

“The tech integration issues for the banks trying to participate for the first time were considerable (unique application forms not matching SBA required fields etc.) but my hope is that the lessons learned in the last week and some upgrades and standardization will help speed the second iteration,” says Nat Hoops Executive Director of the Marketplace Lending Association.

“Our goal is to get relief money into the hands of as many eligible applicants as possible, as fast as possible. Validation of payroll information is necessary to complete the PPP application. For QuickBooks Payroll customers, the customers’ data is already in the QuickBooks system. As a result, we are well positioned to help expedite the loan application process for this group. One in 12 American workers are paid through our payroll systems, which makes this an impactful place to start,” says Luke Voiles, VP and Business Leader of QuickBooks Capital.

This Forbes article provides a list of FinTech companies helping with loans. If you do explore alternative, non-bank lending options, exercise caution to avoid scams. This Inc. article outlines some steps to take to protect yourself in a fraught lending market.

 

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.