As a business owner, I am looking down the barrel of an unprecedented time in our nation’s history and economy. I feel fortunate to be considered an essential service, but that does not leave me without the fear of how to do I keep my team employed and our business viable for the upcoming shift in our nation’s economy.
If you are like me you may have a lot of questions on what the CARES Act is and what it can do to help me through this. Thankfully I have been surrounded by a few people that are much smarter than I am who have tried there very best to keep me informed.
As of today April 2nd this is what I know about how it will affect my business and my clients who are business owners. I hope that you will use this information as one and pass it on to others that it may benefit from the information. Keep in mind I am just a business owner so always confirm with the SBA or another qualified professional before taking this information to heart.
Before jumping into the CARES Act just remember it applies to Businesses, Sole Proprietors, Independent Contractors, and non-profits
The best quick reference sheet that I have found to date was given to me by my friend and mentor Kathy Ricci: You can access it here: Emergency Loan Program Comparison
The first and fastest source to access funds is going to be through the SBA Economic Injury Disaster Program (EIDL). Here is what it can do:
Small businesses applying for an SBA Economic Injury Disaster Loan (EIDL) will be eligible for a $10,000 Emergency Grant to be issued within 3 days of the application being received.
Applicants must certify under threat of perjury that they believe they are eligible for the Emergency Grant.
The Emergency Grant award of up to $10,000 may be subtracted from the amount forgiven when an EIDL loan is refinanced into a PPP loan.
Businesses must be established and licensed before January 1, 2020, and in good standing with the Utah Division of Corporations and Commercial Code (will be verified here).
Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e., W-2 employees).
Applicants must provide six months proforma of estimated lost revenue or other documented loss evidence.
Businesses that have experienced severe economic impact due to the COVID-19 pandemic.
Businesses that can demonstrate a multiplier impact on other industries.
Businesses that play a key role within a strategic state supply chain.
GOED will determine the eligibility of applicants. Applying is not a guarantee of funding.
Financial statements: profit and loss, and balance sheet statements for the previous year, and most recent quarter or month.
Last year’s business state of Utah tax returns (2019 or 2018).
A copy of the business lease agreement or mortgage statement for the business location.
Salt Lake City Emergency Loan Program
Loan Program Guidelines:
Business must be within Salt Lake City Limits (see map)
Maximum loan amount: $20,000
Terms: 5 years
Loans can be used for ONLY:
Working Capital ( i.e. payroll, rent etc.), Marketing, Inventory
Applying for this loan will NOT disqualify you for additional funds from the SBA Emergency Loan Program.
Repayment will be deferred approximately 90 days following the expiration of the local emergency connected to the COVID-19 outbreak.
The funding for the Emergency Loan Program will be disbursed in two separate $500,000 rounds. The first application period deadline was Monday, March 23rd, 2020 at 11:59pm. Completed applications submitted before this deadline will be considered, reviewed and business owners will be notified of their approval status by Thursday, March 26th, 2020. Funds will be disbursed by the end of the week ending on March 27th, 2020.
All incomplete applications will be considered and reviewed for the second round of funding. Staff will contact applicants and assist them to complete their applications by the next deadline for consideration.
The next application deadline will be on Thursday, April 2nd at 11:59pm
Purchasing your short-term rental can be exciting and a bit overwhelming if you are not prepared. A checklist will help you to prepare your investment to maximize the return.
Before you list the home anywhere, buy the correct insurance for the property use! Many insurance carriers will exclude claims on homes if you do not have short-term rental coverage. The coverage is a specific endorsement on some policies. If you are planning on holding the property in an LLC or other commercial entity, purchase business insurance. Often it is not that much different in cost and will save you a lot of headaches in the long run.
Make a plan of how you are going to list the property. Are you going to list it yourself or hire a professional property manager?
If you are going to hire a property manager, you need to be prepared to ask them a few questions:
What is the marketing strategy?
Will you be listing on sights like Homeaway.com, AirBnb ect?
How do they handle damages?
Will they put systems in to monitor water damage, control the mechanical systems, and prevent break-ins?
What is the cost of their services?
Will they coordinate with a cleaning service?
Can they provide you with a revenue projection for their efforts?
How often will they update the listing?
If you are going to manage the property yourself, you will need to take on a few things to ensure you have success.
Make sure it’s clean. Replace all light bulbs and make sure they are working. Remove everything but the minimums. People do not care about your nick-knacks.
Hire a professional real estate photographer and PAY THEM to take listing photos of your home. They will pay dividends for years to come.
Invest in automation: Water detection, Remote water shut off, Digital key locks that can be programmed remotely, Cameras facing the exterior of the property, and a Decibel meter installed inside the home.
Build a house manual. The more quality information you can provide your guests, the better time they will have.
Your manual should include House Rules. (the ones that will get them kicked out)
Parking (if you can, provide a diagram)
Activities close by: restaurants, gas stations, grocery stores, trail maps etc
If you are close to a place that rents items your clients would use set up a referral relationship
Hire professionals to help you maintain the property.
A home cleaner is going to be your best asset to having quick turns and positive reviews. Find out what their procedure is for turning a rental. Do they have a checklist? Will they take photos each time to document damage?
Build a list of professionals that can make repairs when needed. (plumber, electrician, HVAC, roofing, snow removal etc)
Once you have this in place, you are ready to list the property. Use the pictures you paid for. Spend time describing the property. Describe the sleeping accommodations, with photos. Sleeps 10 can be pretty awkward if they have to all sleep in the same room. Build your case about why they should rent from you.
You can list locally in classifieds, but you will need a system to handle the reservations.
Wix.com has a hotel plugin that you can use to do this. It is a bit more work, but the potential is there.
Then you will need to sync the calendars of each sight so that you do not encounter double bookings. Most of the sites above have “how-to’s” to get it done.
Last I would encourage you to find management software that can help keep track of everything from income, expenses, sales tax, use tax, deductions, etc. There are a lot of tax advantages of owning a rental investment. Spend a little to save a lot!
We hope that this helps you with choosing how to manage your new investment and create memories for families and generate that return you were hoping for.
Home owners is not required by law. However, If you have a mortgage on your home the lender that holds your mortgage will require you to carry homeowners insurance. Or they will place coverage for you (forced placed insurance)
When you have selected your insurance carrier the mortgage company will save a portion of your monthly mortgage payment into you escrow account to pay the taxes & insurance once per year. This is known as PITI (Principle, Interest, Taxes & Insurance) In this way you are not having to save separately in order to pay your taxes and insurance.
When you decide to switch insurance to another carrier. The mortgage company has to be notified of this change and they will send a 2nd payment to the new insurance carrier on your behalf to ensure the home insurance is current. This will cause a shortage in your escrow account similar to a negative balance in your checking account.
When you cancel the previous home insurance carrier, they will send you a pro-rated refund of the unused premium directly to you. The previous insurance carrier can not send this money back to your mortgage company to replenish your escrow.
What should you do with the refund check?
Cash it & keep the funds? This is not what we recommend from a budgeting standpoint. When the escrow account is analyzed at the end of the year. They will realize there is a shortage and increase your monthly deposits into the escrow account to make up the difference. This will increase your mortgage payment.
Cash it and send it back to my mortgage as an escrow deposit? We highly recommend doing this. When you receive the refund. Set the money aside and send it back to the mortgage as a separate payment to replenish your escrow balance. Be sure to notify the mortgage company what the payment is for. They could see it as a principle payment and reduce your loan balance, but it will still cause your mortgage rates to increase on the annual review of your loan.
What you should know about your Auto Insurance before you drive for Uber or Lyft!
In the past few years, companies like UBER and LYFT (aka rideshare) have changed the way we travel and what food we have delivered. With just a few clicks, we can arrange a ride and leave the hassles of driving behind us. We no longer need to worry about finding and paying for parking. We don’t need to find a designated driver or navigate unfamiliar streets when traveling in a new city. We don’t even have to venture out to get food anymore.
On the flip side of this, rideshare companies rely on everyday drivers and their vehicles to be the fleet. This provides drivers with income and keeps the cost down for the rideshare. But it brings up the question, AM I INSURED while I’m driving? The answer to this is YES and NO. Of course, it isn’t a simple answer, and here are a few things you need to know before you sign-up to drive.
I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!
I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.
So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”
I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.
I was recently asked this question by one of our Grit Insurance Group clients, and thought I would share the answer here for our readers.
There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.
Some people have absolutely no idea that it’s used in the rate at all.
At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.
By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.
When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).
When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.
This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.
So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.
What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.
This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.
If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.
Why do my auto insurance rates keep going up even though my car is getting older? At Grit Insurance Group, many of our clients ask this question so I would like to address it from a couple of angles.
First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.
It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.
The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.
A human life is not.
When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.
Loss of Income
Loss of use
These are all things that you are covered for on your auto policy. How many of them have to do with your car?
How many of them have a price next to them on your policy?
All of them.
Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.
Let me re-phrase that: your car insurance rate isn’t just based on your car.
You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.
Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.
This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.
That’s what insurance is though — sharing in the cost.
The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.
Hope this helps! If you would like to know more about Car Insurance be sure to visit our page dedicated to it.