[Re-sent] COVID-19 Industry Update – April 2, 2020 (nonmembers)

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COVID-19
INDUSTRY UPDATE & RESOURCES 
 
04.02.2020
KEY UPDATES, RECOMMENDATIONS, RESOURCES FOR OUTFITTERS & GUIDES

Idaho Outfitters and Guides, 

There is both an incredible amount of information coming out right now, as well as a frustrating absence of important details for our industry regarding the relief programs included in the recently passed CARES Act. 

You all have questions--and unfortunately, I don't have the answers to many of them, though not for lack of trying. Nevertheless, in an effort to cut through at least some of the 'noise', I am going to try to outline some of the key updates or potential steps you should take for your businesses and your guides. 

 

FINANCES & RELIEF PROGRAMS/LOANS

IMPORTANT POINTS:
  1. UNDERSTAND YOUR FINANCIAL SITUATION
  2. APPLY FOR THE EIDL AND REQUEST THE 10K GRANT
  3. TALK TO YOUR BANKER TOMORROW ABOUT APPLYING FOR THE PPP 
    • SEE DETAILS BELOW
1. Evaluate your own financial abilities. 
Take the time to sit down and put pencil to paper as you take a clear look at what your business can withstand financially. Map out your financial obligations through the end of the year.
  • Come up with a plan for the worst-case scenario, mid-case scenario and best-case scenario and create actionable steps you can take. 
  • As you work through this, the topic of refunds and policies will come up. As a business, you'll need to decide if you are going to hold onto deposits (per your policy) or if you switch to a different strategy that is softer. For many of you, this will be a decision for you to make personally as it will be directly tied to your ability to make it through this storm. Be sure to take the time to weigh the various implications of each course of action (personal/business economics, reputation risk, client loyalty, etc.). Be sure to put all changes to policies in writing.
  • Importantly, remember that what you do now will affect your clients' perception and opinion of you for years to come.

2. Strongly Consider Applying for an SBA Economic Injury Disaster Loan (EIDL) 
  • MAXIMUM LOAN AMOUNT
    • Maximum loan amount of $2 million: The loan amount is based on the amount of substantial economic injury sustained by the borrower, up to $2 million. Loss of anticipated profits or a decline in sales alone is not considered “substantial economic injury.”
    • “Substantial economic injury” is defined as the amount of ordinary and necessary expenses the borrower cannot cover due to the coronavirus outbreak.
    • Grants of up to $10,000 is available within three days, regardless of approval: A cash advance (grant) of the loan, up to $10,000, can be provided to the borrower upon request. SBA is required to provide the grant within three days of receiving the loan application. The grant is provided regardless of whether the borrower is ultimately approved for the loan and does not have to be repaid.
  • APPLICATION PROCEDURES:
    • Once regulations are issued providing for the new loan features, borrowers can apply online for an SBA disaster assistance loan.
    • Borrowers can also contact the SBA disaster assistance customer service center by calling 1-800-659-2955 (TTY: 1-800-877-8339) or emailing [email protected].
    • When you fill out your EIDL loan application, make sure you request the Emergency $10,000, which is required to be delivered to you within three-days (and is technically a grant, which does not need to be repaid, separate from the loan you're applying for). 

3.  Payroll Protection Loan (PPP)

The Paycheck Protection Program is significantly more complicated than the Coronavirus Emergency EIDL, especially for seasonal businesses, like outfitters.

It is also a brand new program, for which the rules/details are currently being developed. As such, there is much that we simply don't have, and frankly nobody has, details/understanding about in relation to it. We have done our best to answer your questions as they come in, and to provide some guidance to those questions in the Summary Questions [DRAFT/Working] Document.

There is much to figure out about the PPP still, and much that is specific to each operation/business. But we will provide what information and guidance as we can (without overwhelming) below:
-----------
The Paycheck Protection Loan program is a modification of the SBA 7(a) and Express loan programs that works like a combination of a loan and a grant.

How Much can you Borrow?

  • Technically, Paycheck Protection Loans run as high as $10 million. But how much you can borrow depends on your business’s operating costs.
  • Use this formula to calculate how much your business is eligible for:
    • Eligible monthly payroll costs x 2.5 = Maximum Paycheck Protection Loan amount
    • Better yet, use this great tool that America Outdoors created to help you run your actual numbers
How do I calculate monthly payroll costs?
  • Seasonal businesses. The average monthly payroll costs between either February 15 or March 1, 2019 and June 30, 2019. The start date is up to you, the business owner.
What’s an eligible payroll cost?

The following costs count when you calculate your Paycheck Protection Loan amount:

  • Salary, wages commission or compensation — up to $100,000 annually
  • Cash tips paid to employees or the equivalent
  • Vacation, medical, family or sick leave costs
  • Costs associated with losing an employee, like severance
  • Group health care benefits, including premiums
  • Retirement benefits
  • State and local taxes on employee compensation
  • For self-employed individuals, eligible payroll costs include compensation up to the equivalent to what they would receive over February 15 to June 30, with an annual salary of $100,000.
Ineligible payroll costs

These costs do not count toward payroll calculations for a Paycheck Protection Loan:

  • Employee compensation equivalent to an annual salary over $100,000
  • Federal payroll, income or railroad retirement taxes
  • Compensation for employees with a primary residence outside the US
  • Sick or family leave that qualifies for a tax credit under the Families First Coronavirus Response Act
How does forgiveness work?

The SBA will forgive the amount your business spends on the following expenses during the first eight weeks after your loan is disbursed:
  • Employee salaries, commissions or compensation
  • Other payroll costs, including additional salaries for tipped workers
  • Rent
  • Interest payments on mortgages
  • Utilities
  • If your business lays off employees or reduces wages, then the amount of forgiveness you’re eligible for will decrease. You can get up to 100% of your loan amount forgiven.
  • Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. 
For more information on the PPP, review the Guide put together by US Travel Association (it is easily one of the best out there)

Also, be sure to review the IOGA CARES Act Summary Questions document where we've started to address some industry-specific questions.

Outfitters considering loans through the Payroll Protection Program should know that small businesses and sole proprietorships can apply beginning April 3, 2020.  For the 8-week period after the loan is made, the portion of your loan used for payroll, mortgage interest, rent and utilities is eligible for loan forgiveness. 

In all cases, talk to your financial advisor, your bank or lender, about your particular situation for the best, specific guidance for your situation/business.

 
4. If your guides are out of work... 
Click on the image to access the PDF. Or Click HERE


COMMUNICATIONS & POLICY

1. Consider reviewing/updating your Liability Release

[PLEASE NOTE: IOGA CANNOT AND IS NOT PROVIDING LEGAL ADVICE. WE ARE SUGGESTING THIS FOR CONSIDERATION. PLEASE CONSULT AN ATTORNEY FOR GUIDANCE ON ALL LEGAL QUESTIONS]
  • If you haven't already, you might consider updating your liability waiver to include something that addresses 'exposure to an airborne virus, or even specifically to include COVID-19.
  • If you have clients that signed their waiver already, you might consider resending them an updated waiver (if you make changes) or adding an addendum with said changes for them to sign.
2. Reach out to other Outfitters in Idaho to establish reference-points
  • Gather information about what other outfitters in Idaho with similar operations (sector / activity) are and aren't doing/implementing or planning to implement in their own businesses regarding:
    • Any policies/protocols they are implementing within their operation in relation to CDC/Federal/State guidelines & orders, from:
      • Internal staff policies/procedures
      • Operational policies/procedures
      • Policies/procedures for guests 
      • etc. 
  • Remember that if you create a policy and put it online, you are going to have to consistently follow that protocol/policy. 
3. Revisit/draft policies 
Though we have very limited ability to predict what the immediate and near term run and impacts of this will be, experts are estimating that COVID-19 will take time to dissipate. Now is the time, after you've done the steps listed above, to consider and create draft policies on assessing staff health and safeguards, not least client health when they arrive for a trip or experience at your business.
  • Review CDC guidelines and recommendations when considering/drafting any prospective policies for staff/guests
    • OSHA requires that businesses comply with safety and health guidelines
  • This is also the time to review company policies regarding equipment disinfection (as well as protocols for ensuring that equipment is not shared among clients), distancing en route to and while on a trip, etc. 
4. Continue communicating with your clients.
  • Right now our opportunity is to show leadership, responsibility & compassion as businesses and an industry. It is a time to demonstrate our value as businesses, members of our communities and as an industry by helping to inform, inspire, encourage and calm our clients/community and staff. 
  • If you are making adjustments in your company policies, communicate that with them.
    • Examples of this could be offering a shorter cancellation period (45 days instead of 60 days, an option to adjust the dates of their stay, etc.), deferment of credit for trip deposits, risk mitigation and hygiene policies/protocols, changes to your liability waiver, etc. 
5. Communicate with your insurance Agency
  • Outfitters are understandably expressing concerns about their policies and premiums against the backdrop of an uncertain season.
  • Some Insurance providers are therefore working to establish and put in place options to address these concerns, for instance, for insurance policies to be rated on the actual exposure that the policyholder has during the season, with credits or the like if they overestimate gross revenues and billings if they underestimate gross revenues. 
  • Each provider and policy is different, so it is important to have grounded conversations with your insurance provider/agency about your particular case. 
  • Check your insurance policy for "Business Interruption" Coverage.
    • This is usually an 'add-on' to comprehensive policies and may provide relief depending on the terms and restrictions of your particular policy if you purchased that coverage. 
6. Communicate with your staff. 
  • Just like you, your staff is feeling the impact of coronavirus. They will be wondering if they will have work, if they will have the same start date as previously agreed to, etc. As conditions continue to change and evolve, stay in touch with your staff and let them know that you are considering them through all of this. Be sure they have the latest information around COVID-19 and let them know what you are doing on their behalf. The more information you can share with them, the better.
  • IOGA and Redside have teamed up to put together an "Un-Employment Resource for Idaho Guides," which we encourage you to share with your own guides.
    • Clearly, our hope is that this document proves unnecessary, that you all have a strong operating season. But it is only fair to support our guiding community with the information they may, but hopefully will not, need. 
 

SPEAK UP

1. Contact your Representatives.
We need to get loud and present a unified voice/call to our congressional delegation and elected officials here in Idaho that support be given to our industry. Review an updated, referenceable letter HERE.

Additionally, here is a Template Letter, with a more personalized and community-centric message and similar general 'asks', which you can further personalize with your outfit's information and impacts you are feeling/anticipating.
  • Once filling in the bracketed/bolded portions with your own information, you can submit your letter by mail or else by email form via the email forms on each Congressional Delegate's website. That information can be found and those sites navigated to HERE
2. Let IOGA know how we can help you. 
Please contact the IOGA office by calling 208.342.1438 or emailing us at [email protected] or [email protected] with questions or concerns you have. We are committed to seeing this industry through this very difficult time.  

THE AGE OF THE WEBINAR

WEBINAR RECORDING
On Monday March 30, U.S. Travel's government relations team hosted a webinar detailing what the CARES Act means for the travel industry. You can watch the full recording (below) or review the slide deck
UPCOMING WEBINARS
Crisis Financing Options
from Idaho SBDC 

When: TOMORROW, Friday, April 3, 2020  |  2:00 P.M. MT

Many of you have questions about the recent legislation passed to help businesses through this difficult time.  The information is still imperfect, but we can answer many of your questions regarding:  Disaster Loans + 10K "Grant," Paycheck Protection Program, and SBA Loan Options.
Register Now
Understanding the Paycheck Protection Program

When: TOMORROW, Friday, April 3, 2020  | 11:00AM MST

The Paycheck Protection Program is the centerpiece of small business emergency relief in the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program provides $349 billion in loans and grants for small businesses impacted by the COVID-19 pandemic. Applications open for paycheck protection loans for small businesses and sole proprietorships on Friday, April 3.

Register Now
SHOW SUPPORT FOR ONE OF OUR OWN
 
Dustin Aherin is a true gem in the river community. Tragically, a few days ago, Dustin's house in Lewiston burned down. It left nothing  but the garage door. He and Clarabell the dog are fortunately unharmed. Dustin is loved and respected by many, and would never ask for help himself. So I am asking for him.  Let's help Dustin and Clarabell get back on their feet.
 
ADDITIONAL INFORMATION & RESOURCES
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