Stimulus money for soccer clubs?

[Anonymous]

^^
So what is being said is that clubs are not obligated to refund the season dues, but without refunding the fees, they would fail to prove there is a hardship if they are audited.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The PPP stands for Payroll Protection Program. At least 75% has to pay for employee (staff and coaches) payroll and 25% for utility costs (electricity, water and telecommunications).

There’s no mention of refund of money to customers (parents) in the SBA PPP Bill.

Soccer Leagues and Clubs declaring economic hardship is very easy to prove/justify to their lenders and the SBA.

PP above indicating any clubs that applied for PPP and not refunding the parents could be in trouble is 1000% wrong. Please go read the bill.

PP here who writes about this.

I agree, if you read the bill then it looks fine. But the interpretation of the bill keeps changing.

If you read the PPP FAQs (that keep changing), the clubs would be in trouble if there is an audit.

The money is intended to be used between the date of loan origination and the following 8-weeks. The prepaid soccer season lasts longer than the current 8 week limit to use the funds.

Whether the SBA is legally allowed to keep changing the rules of the game and using "vague" terms is another issue.

The PPP does need to be used within 8 weeks and if clubs are continuing to pay all staff at the same rate prior to the pandemic, they should be able to spend the majority of it properly to be forgiven. Nowhere in the bill does it say that the money must be spent on payroll they otherwise would not have been able to pay. Only that it needs to be spent on payroll. Additionally, the PPP loan amount is derived from average payroll numbers (most are using 2.5 average monthly payroll from 2019). So again, clubs should be fine to use most of it in the 8 weeks.

You also fail to mention that there is a big push to change the bill to extend the 8 weeks to something longer. I’m not defending any club to not give refunds as I think there are some clubs that most likely should, but I do think you need to present the whole picture especially if you’re someone that is informed on the subject.

[Anonymous]

Yep, actively working to have the 8 weeks extended, and hopefully the IRS expense deductability issue addressed.

But now there needs to be a real certification of need, which would be a tough showing if you fully collected a full season of fees in advance. It is an easy showing for restaurants and barbers since they have little or no income. Although the soccer season was shut down, revenues for the season were prepaid, so soccer club revenues had minimal impact. I would be interested to find out what other revenues in soccer are impacted by the shutdown.

I want our soccer club to survive, so it doesn't bother me if they keep our fees and get PPP money. And I think they would be under the radar for an audit and the new audit language is more bark than bite. There will be obvious abuses of the system that will make headlines and I doubt youth sports will make headlines.

But I keep my fingers crossed that a large sports complex survives this downturn.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes clubs have applied and gotten money. Does not mean they are refunding money to all

Having applied for this as a small business owner myself, if they take the PPP. money and don't refund and/or waive fees, they will have a hard time getting the loan forgiven, and could actually be in some trouble.

You have to certify that the loan is necessary because of lost income due to the pandemic. Other than clubs whose finances are heavily dependent on profits from Spring tournaments that they had to cancel, I don't see how they could do that if they aren't refunding fees.

The general idea is that it's supposed to be a lifeline, not a windfall.

This is not true at all. They have to use at least 75% of the proceeds for payroll and the rest can be used for mortgage/rent. There's no correlation between forgiveness and refunds to customers.

I'm no expert on how the money has to be used. But it is perfectly possible for the pp to be correct and that loan itself must be used on payroll and rent. The point here is that, if the clubs don;t issue refunds then they have all their regular income so wouldn't need a bailout to make payroll and rent. If they wish to apply for a bailout to cover payroll and rent, they would need to certify that they have lost their income as a result of the lockdown. And if they don;t issue refunds then they haven't lost their income.

Not saying this is the case - just that it could be.

As crazy as it sounds, You also do not have to certify or prove losses to obtain and forgive the PPP. The only requirement is the 75% to payroll and 25% to rent and utilities as the PP stated. Clubs could take the PPP even with no loss of income and still have it forgiven. I’m sure they are looking at the bigger picture of future lost income when deciding on refunds and the ability to survive long term though.

Their problem isn't going to be documenting how the money was spent. It's going to documenting whether it was really needed in the first place. The loan application requires the business to certify that the loan is "necessary to support the ongoing operations of the business."

In response to criticism, the SBA has focussed on that "necessary" language, and reminded businesses of the language on the bottom of the application, which says that knowingly making a false statement can subject the applicant to significant criminal and civil penalties. They have now stated that all PPP loan applicants will be audited. There is currently a grace period extended to 5/15 for businesses to return the loan if it was not "necessary."

So for a soccer club, if there has been no loss of income at all (because they've continued to collect and retain all the same fees), they could be in trouble trying to justify the necessity of the loan. In other words they can't have their cake and eat it too. They can't say to parents, "I'm sorry we have to keep charging you, but it's the only way we can pay our employees," and then at the same time run to the government saying, "Please give us this free money, because it's the only way we can pay our employees."

Here's an article from Forbes if you're interested: https://www-forbes-com.cdn.ampproject.org/v/s/www.forbes.com/sites/alangassman/2020/05/04/was-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions/amp/?amp_js_v=a3&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15887959328580&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.forbes.com%2Fsites%2Falangassman%2F2020%2F05%2F04%2Fwas-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions%2F.

+100 As someone pretty involved with the PPP SBA program, and have written several articles on this. If a soccer program applied for PPP funds, and have not refunded parents, they could be in trouble. Most likely they are the small fish, and may be overlooked, but you cannot have a PPP loan, and have a fully funded soccer program.

Genuine question. How are schools like sidwell with a $50 million+ and no tuition refunded allowed PPP.

[Anonymous]

Anonymous wrote:Yep, actively working to have the 8 weeks extended, and hopefully the IRS expense deductability issue addressed.

But now there needs to be a real certification of need, which would be a tough showing if you fully collected a full season of fees in advance. It is an easy showing for restaurants and barbers since they have little or no income. Although the soccer season was shut down, revenues for the season were prepaid, so soccer club revenues had minimal impact. I would be interested to find out what other revenues in soccer are impacted by the shutdown.

I want our soccer club to survive, so it doesn't bother me if they keep our fees and get PPP money. And I think they would be under the radar for an audit and the new audit language is more bark than bite. There will be obvious abuses of the system that will make headlines and I doubt youth sports will make headlines.

But I keep my fingers crossed that a large sports complex survives this downturn.

Although not strong justification, I think clubs could point to loss of revenue of tournaments, camps, etc. With the language of the bill and guidance so vague, I don’t see how they would be culpable.

Not sure how that large sports complex was financially solvent prior to all of this. If they do indeed survive I will be further convinced that they are a front for a large cartel. The utility bills alone must be insane.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes clubs have applied and gotten money. Does not mean they are refunding money to all

Having applied for this as a small business owner myself, if they take the PPP. money and don't refund and/or waive fees, they will have a hard time getting the loan forgiven, and could actually be in some trouble.

You have to certify that the loan is necessary because of lost income due to the pandemic. Other than clubs whose finances are heavily dependent on profits from Spring tournaments that they had to cancel, I don't see how they could do that if they aren't refunding fees.

The general idea is that it's supposed to be a lifeline, not a windfall.

This is not true at all. They have to use at least 75% of the proceeds for payroll and the rest can be used for mortgage/rent. There's no correlation between forgiveness and refunds to customers.

I'm no expert on how the money has to be used. But it is perfectly possible for the pp to be correct and that loan itself must be used on payroll and rent. The point here is that, if the clubs don;t issue refunds then they have all their regular income so wouldn't need a bailout to make payroll and rent. If they wish to apply for a bailout to cover payroll and rent, they would need to certify that they have lost their income as a result of the lockdown. And if they don;t issue refunds then they haven't lost their income.

Not saying this is the case - just that it could be.

As crazy as it sounds, You also do not have to certify or prove losses to obtain and forgive the PPP. The only requirement is the 75% to payroll and 25% to rent and utilities as the PP stated. Clubs could take the PPP even with no loss of income and still have it forgiven. I’m sure they are looking at the bigger picture of future lost income when deciding on refunds and the ability to survive long term though.

Their problem isn't going to be documenting how the money was spent. It's going to documenting whether it was really needed in the first place. The loan application requires the business to certify that the loan is "necessary to support the ongoing operations of the business."

In response to criticism, the SBA has focussed on that "necessary" language, and reminded businesses of the language on the bottom of the application, which says that knowingly making a false statement can subject the applicant to significant criminal and civil penalties. They have now stated that all PPP loan applicants will be audited. There is currently a grace period extended to 5/15 for businesses to return the loan if it was not "necessary."

So for a soccer club, if there has been no loss of income at all (because they've continued to collect and retain all the same fees), they could be in trouble trying to justify the necessity of the loan. In other words they can't have their cake and eat it too. They can't say to parents, "I'm sorry we have to keep charging you, but it's the only way we can pay our employees," and then at the same time run to the government saying, "Please give us this free money, because it's the only way we can pay our employees."

Here's an article from Forbes if you're interested: https://www-forbes-com.cdn.ampproject.org/v/s/www.forbes.com/sites/alangassman/2020/05/04/was-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions/amp/?amp_js_v=a3&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15887959328580&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.forbes.com%2Fsites%2Falangassman%2F2020%2F05%2F04%2Fwas-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions%2F.

+100 As someone pretty involved with the PPP SBA program, and have written several articles on this. If a soccer program applied for PPP funds, and have not refunded parents, they could be in trouble. Most likely they are the small fish, and may be overlooked, but you cannot have a PPP loan, and have a fully funded soccer program.

Genuine question. How are schools like sidwell with a $50 million+ and no tuition refunded allowed PPP.

They likely applied before the "rules" changed after bad headlines.

[Anonymous]

Anonymous wrote:^^
So what is being said is that clubs are not obligated to refund the season dues, but without refunding the fees, they would fail to prove there is a hardship if they are audited.

The SBA hasn’t required proof as to hardship yet. Currently, they are only asking for a statement to certify that the business is encountering hardship. Not having fields to practice, no league and tournament games might be enough to show hardship.

SBA Bill is to help businesses pay their employees. The intention of this bill is to get money to people (employees of salary of up to $100K or a max of $16,666.66 for two month salary).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes clubs have applied and gotten money. Does not mean they are refunding money to all

Having applied for this as a small business owner myself, if they take the PPP. money and don't refund and/or waive fees, they will have a hard time getting the loan forgiven, and could actually be in some trouble.

You have to certify that the loan is necessary because of lost income due to the pandemic. Other than clubs whose finances are heavily dependent on profits from Spring tournaments that they had to cancel, I don't see how they could do that if they aren't refunding fees.

The general idea is that it's supposed to be a lifeline, not a windfall.

This is not true at all. They have to use at least 75% of the proceeds for payroll and the rest can be used for mortgage/rent. There's no correlation between forgiveness and refunds to customers.

I'm no expert on how the money has to be used. But it is perfectly possible for the pp to be correct and that loan itself must be used on payroll and rent. The point here is that, if the clubs don;t issue refunds then they have all their regular income so wouldn't need a bailout to make payroll and rent. If they wish to apply for a bailout to cover payroll and rent, they would need to certify that they have lost their income as a result of the lockdown. And if they don;t issue refunds then they haven't lost their income.

Not saying this is the case - just that it could be.

As crazy as it sounds, You also do not have to certify or prove losses to obtain and forgive the PPP. The only requirement is the 75% to payroll and 25% to rent and utilities as the PP stated. Clubs could take the PPP even with no loss of income and still have it forgiven. I’m sure they are looking at the bigger picture of future lost income when deciding on refunds and the ability to survive long term though.

Their problem isn't going to be documenting how the money was spent. It's going to documenting whether it was really needed in the first place. The loan application requires the business to certify that the loan is "necessary to support the ongoing operations of the business."

In response to criticism, the SBA has focussed on that "necessary" language, and reminded businesses of the language on the bottom of the application, which says that knowingly making a false statement can subject the applicant to significant criminal and civil penalties. They have now stated that all PPP loan applicants will be audited. There is currently a grace period extended to 5/15 for businesses to return the loan if it was not "necessary."

So for a soccer club, if there has been no loss of income at all (because they've continued to collect and retain all the same fees), they could be in trouble trying to justify the necessity of the loan. In other words they can't have their cake and eat it too. They can't say to parents, "I'm sorry we have to keep charging you, but it's the only way we can pay our employees," and then at the same time run to the government saying, "Please give us this free money, because it's the only way we can pay our employees."

Here's an article from Forbes if you're interested: https://www-forbes-com.cdn.ampproject.org/v/s/www.forbes.com/sites/alangassman/2020/05/04/was-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions/amp/?amp_js_v=a3&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15887959328580&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.forbes.com%2Fsites%2Falangassman%2F2020%2F05%2F04%2Fwas-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions%2F.

+100 As someone pretty involved with the PPP SBA program, and have written several articles on this. If a soccer program applied for PPP funds, and have not refunded parents, they could be in trouble. Most likely they are the small fish, and may be overlooked, but you cannot have a PPP loan, and have a fully funded soccer program.

Genuine question. How are schools like sidwell with a $50 million+ and no tuition refunded allowed PPP.

Easy. Qualifications is not based upon annual revenue. As long as they have less than 500 employees per location, they qualify.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes clubs have applied and gotten money. Does not mean they are refunding money to all

Having applied for this as a small business owner myself, if they take the PPP. money and don't refund and/or waive fees, they will have a hard time getting the loan forgiven, and could actually be in some trouble.

You have to certify that the loan is necessary because of lost income due to the pandemic. Other than clubs whose finances are heavily dependent on profits from Spring tournaments that they had to cancel, I don't see how they could do that if they aren't refunding fees.

The general idea is that it's supposed to be a lifeline, not a windfall.

This is not true at all. They have to use at least 75% of the proceeds for payroll and the rest can be used for mortgage/rent. There's no correlation between forgiveness and refunds to customers.

I'm no expert on how the money has to be used. But it is perfectly possible for the pp to be correct and that loan itself must be used on payroll and rent. The point here is that, if the clubs don;t issue refunds then they have all their regular income so wouldn't need a bailout to make payroll and rent. If they wish to apply for a bailout to cover payroll and rent, they would need to certify that they have lost their income as a result of the lockdown. And if they don;t issue refunds then they haven't lost their income.

Not saying this is the case - just that it could be.

As crazy as it sounds, You also do not have to certify or prove losses to obtain and forgive the PPP. The only requirement is the 75% to payroll and 25% to rent and utilities as the PP stated. Clubs could take the PPP even with no loss of income and still have it forgiven. I’m sure they are looking at the bigger picture of future lost income when deciding on refunds and the ability to survive long term though.

Their problem isn't going to be documenting how the money was spent. It's going to documenting whether it was really needed in the first place. The loan application requires the business to certify that the loan is "necessary to support the ongoing operations of the business."

In response to criticism, the SBA has focussed on that "necessary" language, and reminded businesses of the language on the bottom of the application, which says that knowingly making a false statement can subject the applicant to significant criminal and civil penalties. They have now stated that all PPP loan applicants will be audited. There is currently a grace period extended to 5/15 for businesses to return the loan if it was not "necessary."

So for a soccer club, if there has been no loss of income at all (because they've continued to collect and retain all the same fees), they could be in trouble trying to justify the necessity of the loan. In other words they can't have their cake and eat it too. They can't say to parents, "I'm sorry we have to keep charging you, but it's the only way we can pay our employees," and then at the same time run to the government saying, "Please give us this free money, because it's the only way we can pay our employees."

Here's an article from Forbes if you're interested: https://www-forbes-com.cdn.ampproject.org/v/s/www.forbes.com/sites/alangassman/2020/05/04/was-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions/amp/?amp_js_v=a3&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15887959328580&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.forbes.com%2Fsites%2Falangassman%2F2020%2F05%2F04%2Fwas-your-ppp-loan-necessaryif-not-there-could-be-horrific-repercussions%2F.

+100 As someone pretty involved with the PPP SBA program, and have written several articles on this. If a soccer program applied for PPP funds, and have not refunded parents, they could be in trouble. Most likely they are the small fish, and may be overlooked, but you cannot have a PPP loan, and have a fully funded soccer program.

Genuine question. How are schools like sidwell with a $50 million+ and no tuition refunded allowed PPP.

Easy. Qualifications is not based upon annual revenue. As long as they have less than 500 employees per location, they qualify.

Good info