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Episode Summary
The SBA site is crashing. Your banker isn’t returning calls. The 800-page CARES Act got signed Friday and you have payroll on Friday after that. I brought in Jim Stelten, a Business Value Creation Partner at Bergen KDV, because he and his team spent the weekend tearing through the bill and built a two-page cheat sheet on the two programs every owner-operator needs to understand right now: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). We dug into who qualifies, how the loan amounts actually get calculated (roughly 2.5x average monthly payroll, capped at $10M for PPP), what counts as payroll (including the $100K-per-employee question that everyone is getting wrong), which loan gets forgiven and which doesn’t, the interest rate and term trade-offs, the $10K emergency grant inside EIDL, and the eight documents you need stacked before you call your banker. Cash is king. Call your customers, your vendors, your lender, and don’t go silent. Apply for both programs, march toward a deadline, and start building the 13-week cashflow that gets you to the other side.
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## Top 10 Takeaways- The CARES Act money is finite. 690,000 businesses chasing $350B, and FIFO at the bank is real.
- Your first call this week is your banker. Tell them you’re alive, and book the date to start your PPP application.
- PPP loan amount is roughly 2.5x average monthly payroll, capped at $10M. Know your number before you walk in.
- The $100K-per-employee cap is a ceiling on comp, not a disqualifier. Count the employee, cap the wage.
- PPP gets forgiven if you keep payroll for eight weeks. EIDL doesn’t. Pick based on what you can prove you spent.
- Cash is king. Forecast weekly, put loan proceeds in a separate bank account, document every dollar.
- Don’t go silent with customers, vendors, or your bank. Silence creates surprises, and they’re never the good kind.
- Get your eight documents stacked before you apply: financials, tax returns, ownership, licenses, loans, resume, history.
- The owner makes the calls. The team gathers the data and files the applications. Don’t try to play both seats.
- Apply for both programs now. Guidance and timing keep changing. Get in the queue while there’s still money.
Sound Bites
“Cash is king. You know what, it’s a new era. We don’t know how long this is going to last. Protect your cash and manage that very closely from tomorrow forward.” (@TBD) — Jim Stelten
“In my conversations with bankers over the past week, very consistent message from them all. There is absolutely nothing that you could say that would surprise them. They’ve heard everything.” (@TBD) — Jim Stelten
“Focus on one thing to do each week, one big thing, and then focus on one big thing to do every day. Because if you try to consume all of this at once, it’ll overwhelm you.” (@TBD) — Jim Stelten
“The worst thing to do is for a business owner to kind of just pull in and not communicate with those people. Because if you do that, the surprises typically aren’t very good.” (@TBD) — Pat Hobby
“You should be the one having the conversations with the lenders, with the customers, with the suppliers. Get the other people to have these conversations, or to get the data and to be filing this stuff for you.” (@TBD) — Ryan Tansom
About This Episode
Jim Stelten is a Business Value Creation Partner at Bergen KDV, a CPA and business advisory firm with nine offices across the Midwest, 15,000 clients across all 50 states, and roughly 500 people. Before joining the firm 11 years ago, Jim served as CFO of multiple companies and ran a retailer for five years. In the days following the CARES Act signing on March 27, 2020, Jim and his partners worked through the 800-page bill and built a two-page cheat sheet comparing the Paycheck Protection Program and the Economic Injury Disaster Loan. This episode walks owner-operators through that cheat sheet, plus the cashflow discipline they need to survive the next 90 days.
Resources Mentioned
- Bergen KDV — Jim’s firm, CPA and business advisory across nine Midwest offices.
- Arcona — Ryan and Pat’s firm at the time, growth and exit advisory.
- SBA website — Where to apply for the EIDL directly and find approved PPP lenders.
- Next week’s episode with Jeff Sands — Battle tactics for owners in cash trouble who need to generate it fast.
Connections
Phase + Module:
- Module 4 — Sustainable Financials — Cashflow discipline as the foundation when the economy goes sideways
- Module 1 — Ownership Goals — The owner’s seat during a crisis: who makes the calls and who gathers the data
Concepts referenced:
- Cash Conversion Cycle — Why the gap between AR, AP, and payroll matters more in a downturn than any other quarter
- Three-Statement Model — The closed loop that lets you actually forecast cash 90 days out
- Free Cash Flow — What you’re trying to protect when revenue drops 50%