Michael Strickland of Bandit Lites shares news on additional PPP—Paycheck Protection Program. The Senate passed by unanimous consent a five-week extension on Tuesday night just before the midnight application window on the program was scheduled to close. The House has to pass the measure and President Donald Trump would have to sign it before the extension would take effect. Both chambers of Congress are expected to adjourn by the end of the week for a two-week recess.
July 2 second update:
Attached is the letter you need to copy, paste and e-mail to your Congresspeople and Senators.
Please use the link provided below to locate your Congresspeople and Senators.
Go to their website.
Insert their name at the top of the letter, then your name address and phone at the bottom of the letter.
Then cut and paste the letter into the box provided on the legislators website, and send.
The letter is below.
The link below will guide you to them.
https://www.usa.gov/elected-officials
July 3, 2020
Dear Senator / Congressperson XXXXXXX,
I am writing you concerning the survival of the Live Entertainment Production Industry. Please consider the following:
PPP EXPANSION FOR LIVE ENTERTAINMENT PRODUCTION INDUSTRY
The Live Entertainment Production Industry is a 38 billion dollar a year industry with over 10 million people working in the industry.
The Live Entertainment Production Industry will have zero income until January 2021.
To survive, the Live Entertainment Production Industry must have the following PPP Expansion from the SBA.
An additional 20-week PPP fund to be provided to all firms that received the initial PPP. This will allow firms to pay employees until December 31, 2020
This funding needs to be in the hands of the industry by August 14, 2020.
Full liability protection from all COVID 19 legal actions.
The new tranche of PPP will not require any additional vetting, but simply the execution of new notes under the same conditions as the original notes. This new PPP is needed for all the Live Entertainment Production Industry firms to survive while at zero income.
Absent this relief, the entire industry will cease to exist.
Time is of the essence as the original PPP funding expired June 15, 2020.
Sincerely,
Name
Address
Phone number
Please share this e-mail with as many people as possible and urge them to communicate with their legislators as well.
Our strength is in numbers.
Thank you all for everything you are doing
We are making a difference and the legislators are listening.
Thank you,
Michael T. Strickland
Chair and Founder
Bandit Lites
July 2 update:
Friends,
The House passed the PPP Extension Bill late last night by Unanimous Consent. It is on the Presidents desk today for signature. I am assured he will sign it by Friday at the latest.
I have had a few questions in regard to Update 2 yesterday.
At this moment, the proposed next round of PPP would indeed be in the form of a Loan that will be convertible to a Grant, and completely forgiven.
There is a lot of conversation abut making the forgiveness even easier.
Net, it seems that the new PPP funds will be distributed either under the same terms as the first PPP loans, or perhaps under even better terms.
I will not confuse people with the many rumors, as that is what they are: rumors and wishes.
At some point between July 20 and 31 Congress will come up with a solid bill, and at that point we will all know the terms and conditions of the loan.
I am however assured it will be at least the same as the first round of PPP money.
This scenario would potentially give us money mid-August and allow us to accrue and pay out the money on payroll between mid-august and December 31 in order to be forgiven.
More as it comes in.
I will have a letter today to send to our political leaders.
As always, if you can have a direct conversation with a political leader, please do so.
Thank you all for what you do and have a great day
Michael T. Strickland
4pm July 1 update:
They feel certain the House will pass the extension to the original PPP filing date Thursday and the President will sign it Friday.
Nothing else will happen between now and Friday in our arena.
Congress goes into recess Friday July 3 through July 19.
Between July 20 and August 9 Congress will work toward a 5th Relief Bill.
The additional funding for the narrow band of businesses, including our industry, will be part of the larger Relief Bill. (It WILL NOT to a stand-alone clean bill).
Remember, it is a narrow set of business and individuals that qualify.
- You must have obtained a prior PPP loan
- You must have lost 50% or greater of your income.
- You must have spent all of your prior PPP
- You must have 100 or fewer employees per location
- Loan maximum not yet determined (this is a change)
As I suggested before, this seems to fit most of our industry. Do not forget, individuals can apply for this as well.
Lines in the sand as defined to me about this bill that are relevant to our industry:
- It must and will include complete liability protection
- It will not include the current version of Enhanced Unemployment Insurance, as many people make more money not working.
- It will include future funding for business, or, in other words, more PPP, though it may not be called that.
Items I/we/they are pushing for:
- Funding that will last to end of the year.
- Getting the bill passed quickly so money can be in hands of businesses by mid-August.
As this is now definitely part of the larger relief bill, there are many other issues that are involved. A bill this large and this complex will and does take time. Many details do not concern our industry but they may and probably will slow the process down. There seems to be a general bi partisan agreement that select industries including live entertainment need this assistance to survive to the end of the year.
There may be some form of enhanced unemployment, seemingly one that will cap the amount a person receives such that they are not paid more to not work than they are paid to work. This is all a work in process.
The net result seems to be that our industry should see some form of relief mid-August.
Thank you for your attention and support.
I will be back with you and have a letter to send to your political leaders.
Be safe,
FACT
I am unsure how many of you understand exactly how Congress functions. To that end, when they are in session, they typically start a week either beyond noon on Mondays, or in some cases Tuesday morning. They typically end sessions Thursday nights, or sometimes noon Friday. This allows them to travel to and from home. Thus, Mondays and Fridays are really not very productive days. Tuesday, Wednesday and Thursday become the most productive days.
Last night the Senate worked late, and Senator Cardin and Senator Rubio , in a Bi Partisan effort, came up with a plan to extend the deadline to file for the original PPP to August 8.
In both houses, either party can move to unanimously pass a bill by the motion of a single person. Also, a single person can object and stop the motion. This is known as Unanimous Consent.
Last night Rubio on behalf of the Republicans and Cardin on behalf of the Democrats moved to unanimously pass a bill to extend the PPP filing deadline to August 8. The bill passed the Senate.
It now must pass the House, and because of the lack of time, the house will also need to pass it by Unanimous Consent. The President then has 10 days to sign it.
Here is why this matters.
The filing deadline for original PPP was midnight last night. They “beat” the deadline by passing the bill out of the Senate before midnight.
There was a lot of conversation and legal maneuvering around the fact that, from one point of view, if the PPP Act deadline passed, that the 134.5 billion dollars left over would or could revert back to he Treasury and would not be available to the SBA to assist small business.
There was a lot of conversation about moving that 134.5 billion to other areas.
Both sides of the isle recognized the need to keep these funds with Small Business, and thus they moved quickly in a Bi Partisan fashion to extend the deadline to apply for original PPP funding. That bill keeps the 134.5 billion available to small business and it cannot be moved elsewhere for now.
They do not see much “new” application for these funds. Rather, both sides of the aisle envision the discussed “Round Two” of PPP which is sorely needed by a small segment of businesses.
The largest part of this small segment resides in Leisure and Entertainment, and Live Entertainment makes up the largest part of that.
This includes all aspects of Live Entertainment, from production firms to venues to suppliers, management and so on.
If it passes the House, and they expect it to, then the 134.5 billion is still available to small businesses.
The importance of August 8th is twofold.
First, that is the last day of the next session of Congress.
Second, it allows Congress from July 20 to 31 to come up with additional use of the original PPP funds in a potential “second round” and to also come up with over arching 4th Relief Bill (covering a large number of items).
Thus, extending this deadline to use the original PPP funds gives Congress two more weeks in July to come up with additional PPP support for small business.
Everyone realized the additional round of PPP would not be worked out by this coming Friday.
Thus, this is good news.
We are still alive with a look at potential additional PPP funding.
The better new is that this concept does have Bi Partisan support which is, at this moment, unanimous.
The next hurdle is getting local lenders to agree to it, as many local lenders have already loaned as much as they are comfortable loaning. But that is a separate issue at this moment.
Here are a few of the details being considered going forward, and none are agreed to yet.
As before, 100% of the funds used to meet payroll will be eligible to be forgiven. Unlike the first PPP, there is a concept that would potentially allow borrowers to convert the funds used for non-payroll items to a 2%, 20 year term loan.
There is a concept being pitched to allow companies with less that 300 employees to use funds for non-payroll items, also on a 2%, 20 year term loan, with no payments for the first 4 years, and with the SBA perhaps paying the accumulated interest over the first 4 years of non-payments
These are all just being negotiated, and it is unclear exactly where this will end up. I simply wanted to share the conversation with you.
OPINION
Here are some opinions I have gained from hours of conversations over the last 2 days. Please know this is only opinion.
The additional round of PPP could end up as a stand alone bill or it could end up as part of the 4th relief act. From what I have heard, it feels like it will end up as part of the 4th Relief Act.
The Enhanced Unemployment Insurance expires July 31 (that is a key date, as it is before the August 8th day that the Senate just extended the PPP application deadline to).
The two parties both have items they wish to see in the next relief Act. They “trade” chips to get what they want.
One possible scenario is this.
The Republicans want COVID Indemnity Release to be provided for all businesses. The Democrats want the Enhanced Unemployment extended to December 31. There is heavy rumor that the two parties will trade one for the other.
That means the Democrats would allow the COVID Indemnity Release to be granted and the Republicans would allow the Enhanced Unemployment Insurance ($600 on top of what the State provides) to continue to the end of 2020.
THIS IS ONLY A THEORY, SO PLEASE DO NOT STATE THIS AS A GIVEN, IT IS NOT.
It does not “feel” like there is any real push back to using the remaining 134.5 billion to provide small business with a second round of PPP.
Remember, it is a narrow set of business and individuals that qualify.
- You must have obtained a prior PPP loan
- You must have lost 50% or greater of your income.
- You must have spent all of your prior PPP
- You must have 100 or fewer employees per location
- Loan has a 2 million dollar maximum
As I suggested before, this seems to fit most of our industry. Do not forget, individuals can apply for this as well.
From my many conversations, it “feels” like this will pass and will be part of a 4th Relief bill. It would be done by July 31. This is only an opinion.
The one issue I and others are still pushing is to change the limit from a 10 week relief to a 24 week relief. That would, by default, raise the 2 million dollars to a bigger number to cover the additional weeks.
This part is still unsettled, but several of us are pushing for it.
As we all know, there is a very real chance our industry will not see any significant income until 2021. Thus, we need 24 weeks of assistance.
If indeed the EUI is extended and additional PPP is granted, I feel some firms would keep their people on EUI and use the additional PPP for operations, creating a long term 2% loan with no forgiveness. Again, just an opinion, but I have heard many people tell me they would need to do this to survive.
NEXT STEPS
Again, as I asked before, please sit tight for the moment. Allow some of the political process to play out until Friday. I have been asked this by my contacts.
They want to get through to Friday. At this point, we will change nothing between now and Friday. Their focus right now is the Defense Spending bill.
We will then have two weeks to craft our letter to send all the Congresspeople and Senators.
Remember, they go on a two-week break Friday and return July 20 to 21.
I hope this gives you a better understanding of where things sit at the moment.
I welcome all questions, comments and ideas.
I want to thank all of you for everything you are doing.
The strength in this is the sheer volume of people we have involved.
Please feel free to share this with as many people as possible.
We gain our strongest voice by sheer numbers.
I also want to thank our friends in the entertainment media that carry these stories, as that too is a large part of our voice.
Joe Lamond and the good people at NAMM have also stepped up and are working with us as another large voice, and I wish to thank them. More on this later.
I will have a letter in the coming days that we can again all send to our political leaders.
In the meantime, if any of you have direct personal relationships with Congresspeople or Senators, please call them directly and have direct conversations.
Take care and thank you,
Michael T. Strickland, chair and founder, Bandit Lites