Move beyond the confusion and find out how your janitorial PPP loan can help you and your community
While businesses across the country are closed, office workers are logging on from their kitchens and supermarkets are turning into delivery services. Meanwhile, many janitorial companies are swamped. COVID-19 has transformed our economy into a surreal landscape where some of the most essential jobs in the country (outside of health care) are in the service industry.
Delivery services, take-out restaurants, and commercial cleaning services are more in demand than ever. But that’s not universal. And some of these businesses, including cleaning businesses, are relying on their janitorial PPP loan to keep their doors open and their mops moving.
For some companies, the initial rush of coronavirus cleaning service requests is slacking off, and long-term clients are suspending their accounts. In the midst of this massive economic uncertainty, however, Congress instituted the Paycheck Protection Program or PPP.
The program is helping a lot of businesses keep their lights on even while their doors are closed. And commercial cleaning companies that have found themselves low on work are in a unique position to use their janitorial PPP loan for the greater good of their community.
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How your janitorial PPP loan works
First, some details about the loan program. The most important thing to know is that a janitorial PPP loan is a forgivable loan, provided you meet specific requirements. Or to put it bluntly, if you find that business has dropped off significantly, a PPP loan is potentially free money to help you keep your business running.
Here are some of the details.
- You must certify that the “funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.”
- A janitorial PPP loan is fully forgivable as long as you use at least 75% of the loan for payroll. The remaining 25% can go toward payroll, interest on mortgages, rent, and utilities.
- For any portion of the loan you use for other purposes, you have a six-month payment deferral on repayments, with a 1.00% fixed interest rate.
- PPP loans are for small businesses with 500 or fewer employees. That includes sole proprietorships, independent contractors, and self-employed individuals.
- You can apply for the loan through any SBA lender or federally insured credit union or depository institution.
And there is a reasonably simple, three-step process for applying, and you can find the application on the website of the United States Department of the Treasury.
Steps for applying:
- Calculate your average monthly payroll (Your loan total is 2.5 times this number).
- Collect supporting documentation, such as payroll summaries and business tax returns.
- Fill out the borrower application form and submit it to your lender.
Once you get the loan, you have eight weeks to use the money. It is critically important to thoroughly document how you spend the money – especially if you are hoping for loan forgiveness. This means tracking how much you are putting into payroll, how much gets used for rent, and so on.
It’s important to note, too, that you cannot lay off your employees during the eight-week period in which you are expected to use your loan. If you’ve already reduced your staff, you must rehire them and maintain salary levels. As per the Treasury Department, “Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”
So what happens if you have cash for payroll and limited business? It’s time to put that janitorial PPP loan to work.
Working through your janitorial PPP loan
There are a lot of ways you could use money from a PPP loan toward payroll even if you don’t have the business at the moment. Of course, if you did still have a full schedule, you wouldn’t need the loan, right? So let’s assume you have “free” time on your schedule. Here are some ways you could pay your employees (which is a requirement of the loan) and take advantage of not having to worry about payroll for a bit.
1. Give them time off.
There’s nothing wrong with taking a break. In fact, with schools closed, some of your employees may need to stay home to take care of kids. Other employees may have compromised immune systems, or they might live with someone at high risk.
2. Share the “wealth” with your clients.
Business might be down, but you may still have a few clients on the books. This would be an excellent opportunity to show them how much you appreciate their support by giving them extra services. Perhaps an additional carpet cleaning for a department store or maybe deep clean heating and cooling vents and accessible ductwork.
3. Pay your employees to volunteer their cleaning services.
Is there a nonprofit organization in your community that could use some volunteer commercial cleaning services? Food banks, soup kitchens, child care facilities, medical offices, or even the homes of health care workers would all be possibilities. Since you don’t have to worry about payroll, this would be a simple way to do something for the greater good of your community.
4. Pay your employees to volunteer in the community.
There are plenty of organizations that could use an extra hand right now. Give your team the chance to volunteer in a non-janitorial capacity as their “work” while you have downtime.
We should note, however, a janitorial PPP loan isn’t an opportunity to offer services to the community or clients at the expense of your team. These efforts are all ways you can fill the time that you would be working under normal circumstances. It would be unethical to use these funds and expect your employees to do extra work as a public relations or marketing gimmick for your business.
Your janitorial PPP loan can help keep your business afloat when your accounts dry up. But it can also benefit the people in your neighborhood.
Increase the efficiency of your team, reduce your costs, and improve results. With Janitorial Manager, all this and more isn’t just a dream, it’s your new reality. Contact us for a free demo right now and see how it works!