Goosmann Law Firm 0:01

Do complex legal issues hold you back? Let's get energized and bring clarity to your top legal questions. This is Law Talk with the Flock by Goosmann Law Firm.

Jeana Goosmann 0:30

Hi, welcome to Law Talk with the Flock. I'm your host, Jeana Goosmann . I am a CEO, author and managing partner of the Goosmann Law Firm here to help navigate you and your way through your life as a business leader and general business today. I'm really excited to have with me. I have a guest on the episode today, Mack and Mack is the president of Arbor bank in Omaha, Nebraska and today we're going to be talking about what's going on in the business due to COVID-19 and this new era that we're all in. So yeah , welcome to the podcast, Mac.

Mack La Rock 1:02

Hey, thanks a lot for having me.

Jeana Goosmann 1:04

Absolutely. I'm excited to have you on, and I know we had some technical issues we were working through and so thanks for being patient with us here as we get this kicked off today.

Mack La Rock 1:14

Hey , no problem. That's how technology works, right? We're all getting more used to using even more technology, but sometimes they still want to pull our hair out much like a lot of these issues that we're dealing with COVID. Yeah. Well that's for sure. We and to your point to, you know , we haven't seen several client issues. Obviously we've, I like to think we've been on the front line of this COVID-19 issue in dealing with the small businesses who are, they have been directly impacted obviously the hardest hit have been the restaurants, the dental offices, the chiropractor's, retail locations just due to the mandatory closures. And, there's a lot of uncertainty out there and the crystal ball is hazy, right?

Jeana Goosmann 1:59

It is. It is. Yeah.

Mack La Rock 2:00

And I would tell you the PPP process was, was very similar. It was, it was a process that was really rushed out the door , rightfully so that Hey, we need to hurry up and get funds in small business owners hands. But with that, there was a lot of clarifications that a banker like myself would really like to have had upfront. And, and I'm sure you've heard in the media has done a nice job hope of explaining all of those issues as well. But , there were a lot of unknowns yeah. For the small business owner for the banks. And we were the ones that were, yeah . Providing that guidance and we're so used to providing guidance and having the answers to those questions. So , there was a lot of uncertain times. But, I would tell you that at least in this first two rounds, we're excited about what we've been able to do. As a community bank, we helped just over 500 small businesses and you know, roughly 65 million in loan volume for a $400 million bank. That's pretty exciting.

Jeana Goosmann 3:03

Absolutely. That's huge. Congratulations on helping so many businesses at this critical time.

Mack La Rock 3:10

Yeah. Well thank you very much. We were very proud of it. A lot of long hours and I mentioned the gray hair earlier when we were signing on. I definitely have a few more of those.

Jeana Goosmann 3:19

Well when people are excited to go be able to get their haircuts too, aren't they? So things are all looking forward too.

Mack La Rock 3:25

Yes. Yeah. I think we're all excited about the openings and know obviously restaurants, dental offices that were , were closed. Yeah . You know, a lot of individuals just laid off and without jobs. So with these opening, you know, I think that, I don't know what your feel is, but I feel as though there's an energy out there. Just the fact that, hey, you don't have to go get a pickup order. You can actually stop and we'll have dinner. Right? And, now maybe you want to wear your mask. I don't know. But , I think that just that energy is really exciting to see and hopefully a lot of these businesses bounce back quickly.

Jeana Goosmann 4:04

Absolutely. I know we're a resilient people, right. And as a result, I think we'll get through this in the long run. It's just can be a little challenging in the meantime. And you mentioned too how there hasn't been a lot of guidance, and I know they're kind of writing some of the rules after the fact then that is so true. That is so true. And in fact, you know, early on it was determining the loan amount . Okay, but the whole idea is that in an ideal world in eight weeks, that after this money is spent that these business owners are going to be coming back and asking for forgiveness. And those are the major questions that we're needing to answer now. And again, much like from the beginning, there's not a lot of guidance provided as of yet. Now , you know the answers that we're giving to those customers are, we're interpreting it, the rules as we go. As is the SBA , our local offices don't have all the answers either. The treasury is providing some guidance along the way. The most recent was updated as of today and so they are continuing to provide that guidance. But again, on the forgiveness piece is the biggest question because in theory that 75% of these funds have to be used for payroll at least 75% and then up to 25% can be used for rent , utilities, mortgage interest. Okay, so so what we believe is going to happen is that after that eight week period, we will, we will have a calculator if you will, one page application that does provide for their forgiveness. But until we have that definitive rules, well we're telling all of our business owners keep your receipts and, and that's a figurative term, but in theory, continue doing business as you would very similar information that we asked upfront to define what that loan amount was. We believe will be very similar information to what we're asking for for the forgiveness piece document document document as lawyers like to say. That's exactly right.

Mack La Rock 6:07

And I'd tell you there's probably half of our 500 plus in business owners that decided to open up an entirely separate checking account to funnel all of those funds through that checking account. That isn't a necessary thing, but a lot of the business owners potentially maybe the ones that maybe didn't have the sophisticated accounting in-house accounting, they decided to go that route just to, just to help document. It helps to keep from co-mingling.

Jeana Goosmann 6:34

That's exactly right. It's exactly right. So what else are you seeing out there in addition to PPP? Cause I know that there's, there is some of business still happening too.

Mack La Rock 6:44

Okay. Yeah, most definitely. We are definitely seeing folks that had projects that they had on the radar and some have decided that hey, we're going to hold off and see what happens here. Right? Whether that's real estate, whether that's acquiring an existing business, but we're also seeing folks that are optimistic that hey, the economy was strong. This is a blip on the radar. Let's continue pushing forward. You know , the majority of those are the ones that are well capitalized and the ones that can weather these storms. And I think that that's the biggest thing is as these businesses are well capitalized, they can weather these storms and continue doing business as usual. Especially if they didn't have it all tied in the stock market and they're not the rollercoaster that's starting to come back.

Jeana Goosmann 7:28

It is, thankfully, yes. Still in here on the TV Dow's at 23,000 today down about 500 so yeah, it could be worse. But you're right. Absolute rollercoaster . The things that we were seeing initially the businesses that we saw were definitely affected upfront where the restaurants, the chiropractors , the dental offices, the retail stores that were forced to close, right . One of the questions that we're fielding now a lot is from our landlords. So the landlords are now having those conversations with the restaurant, with the retail store, with the dental office that was paying them rent. And because of the closures now the landlord is potentially not being able to collect the rent. And then, so in theory when, what we're telling those individuals in that case is, please tell your tenants, go talk to their bank, go find some PPP funding. There's still money out there. Believe it or not. When the second round came out, they were telling us it was going at $3 billion an hour. You know , that was two weeks ago. Now they're still fun. So yeah , the good news and from my impression on that is that the majority of small business owners that need the funds have been helped. I'd tell you, we are still seeing a handful of them that were left. Whether they started the process and kind of got lost in the shuffle. So we are still seeing those folks. But I think the vast majority of small businesses that have needed the funds are getting it. Okay . But on that note of the landlords, well we are recommended to those individuals too , is go talk to your banker. If you have debt on that real estate and your tenants are affected first stop , have them get the PPP funding to help cover the rent. But if that is not the case and they are not able to go talk to your bankers, we have ability to go interest only to defer payments to restructure some of that debt in these uncertain times. So now every bank has a different approach to that. So, it's not flat across the board, but yeah , I would tell you to start that conversation with your bankers, you bet. And those that get the PPP funds, they can use up to 25% of that for things like paying their rent.

Mack La Rock 9:38

Absolutely. Rent, mortgage interest, all of it , all of the above, up to 25% you're absolutely correct. So those debts were incurred before they had the issues, then they're able to use a portion of that money and still haven't forgiven for those things that are, are not payroll. That is, that is absolutely correct. And then on that forgiveness piece, as well as it's very important to keep in mind that even if these small business owners say they weren't able to rehire all of their employees because some of those employees are on unemployment and they weren't able to open their doors, even if those funds aren't forgiven, it is an SBA guaranteed loan. And what they , it's at 1% believe me, that's us. Bankers don't like a 1% spread. It's kind of hard to keep the lights on that . But with that it is a 1% loan, which is a very attractive loan.

Jeana Goosmann 10:26

So at the end of the day, if, let's just say 75% of that can be forgiven, that remaining 25% just becomes a loan that those folks can use those funds for other operating expenses. They just have to be paid back over a two year period at 1%. Right. And get to give out a lot of 1% loans. Right. And this is a very unusual circumstance. No, in fact, we've been paying, is that on the positive side? You know, as of late. So, yeah, that's awful difficult to work in the margins there. I am sure I navigating all of these issues and such uncertain times has been quite the challenge. Thank you so much for can I explain to you some of what you're seeing out there and I got to narrow . So what restaurant are you most looking forward to going back to?

Mack La Rock 11:12

You believe it or not it is. Cilantro's. Cilantro's is the family's favorite. If you haven't had it, they have a margarita Corona drink that is to die for.

Jeana Goosmann 11:25

Well that's perfect for the Corona time, the margarita Corona drink. It's called the California. Well, that's a great tip to Mack. Thank you again so much for being on the podcast with me today and sharing with our listeners what you're seeing out there and some great helpful tips for business owners and folks that are trying to make it through to the other side. So yeah , I want to thank you once more and for our listeners out there make it worth it. Thank you.

Goosmann Law Firm 11:54

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