Paycheck Protection Program (PPP) with Ornella Yovo and Hannah Smolinski

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Paycheck Protection Program (PPP) with Ornella Yovo and Hannah Smolinski

On this episode of Financially Naked: Stories from The Financial Gym, our host is Ornella Yovo, New York based Financial Trainer and entrepreneur, and she is joined by Hannah Smolinski, founder and CEO of Clara CFO Group, to discuss the Paycheck Protection Program (PPP).

Podcast Notes

  • Hannah owns a virtual CFO company and they help small businesses all over the country make the best financial decisions to fuel their growth. This is done on a fractional CFO level.

  • In March 2020, everyone was talking about the CARES Act and that got Hannah interested in learning more. It led her to create a YouTube channel to help entrepreneurs understand what is available.

  • Economic Injury Disaster Loans (EIDL) have been around for a long time and they come up any time there is a natural disaster or a big event happens that affects small businesses. These are long-term, 30-year, loans and they are not forgivable. 

  • The Paycheck Protection Program (PPP) is unique. It is offered to small businesses and is forgivable if the small business uses the funds in the right way, within the timeline, and they apply for forgiveness. 

  • On December 27, 2020, another round of PPP funding was opened up. If you are a small business or a freelancer and report your income on a Schedule C, and if on Line 31 you have a net profit, you can apply for a PPP loan. 

  • You can use this for 2019 or you can use an estimate for for 2020. The amount on Line 31 is used as a basis to calculate a loan amount. You can use up to $100,000.

  • You can go to a bank that is participating with the PPP to apply, or you can use an online bank. This is a first come, first served program, and almost $300 billion was recently added. The application is closing 3/31/21, but there may not be any money left by then.

  • If approved, the money will be distributed to your bank account. In some cases, you may be required to use a business account. You will then make a distribution to yourself during a covered period (between 8 weeks and 24 weeks from when you receive the funds). 

  • You are allowed to get roughly 2.5 months of average income. At least 60% of the loan needs to be used for payroll costs. 

  • Smaller, local banks are able to be a little more responsive and flexible than larger banks. Hannah used a regional bank to apply and she was able to email the branch manager directly with questions.

  • Part of the growth of her business or any business is getting clear on what your audience really wants. It takes time to get there. Test, try, and stretch. Don’t be afraid to try something and have it flop. Learn from it. You will only grow when you change things.

  • The pandemic has shown what it looks like to have a sustainable business and what helps weather the storm. Businesses that have cash and not a lot of debt are able to react and change things up to offer their services differently. It is important to evaluate if your business model is working and if you are able to generate profit regularly. Are you bringing in more than you are spending? 

  • If you are not designing your business to be profitable, it won’t be a sustainable business. Bookkeeping is key.

  • Ornella opened a restaurant in January 2020, right before the pandemic. She was burning through cash and she had to evaluate if her business was working, and she chose to close the restaurant. If the long-term viability is not there, a loan is not going to make a difference.

Connect with Hannah

Founder & CEO of The Clara CFO Group and Upside Financial Senior Advisor  

Hannah Smolinski is a CPA and the founder of Clara CFO Group, a virtual CFO and consulting services firm providing small businesses with financial clarity as they grow. Her experience working for one of the world’s largest accounting firms inspired her to bring that level of financial expertise to the small business community through financial strategy, best practices, and knowledge to realize their missions.  

YouTube: Hannah Smolinski, Clara CFO Group, @claracfogroup

Website: claracfo.com

PPP Forgiveness Product: upsidefinancial.com

LinkedIn: Hannah Smolinski

Connect with Ornella

Instagram: @Ornellayovo

FinGym: https://financialgym.com/team/ornella-yovo

The Financial Gym Team PPP, Small business, Black VoicesComment