top of page
  • paloisio

Focus Management Group: August Month in Review

Each month we will be posting an overview article that covers our recent company articles, announcements, and insights. Below is for the month of August.

Focus Management Group - Employee retention credits

Are the Employee Retention Credits (“ERCs”) a Reliable Source of Liquidity?

Many businesses have qualified for ERCs, and are using this program as a source of liquidity – to help fund operations and deal with the impacts of emerging trends such as labor shortages, inflation, supply chain issues, etc.

The question is - Are these credits the reliable source of liquidity many businesses and their lenders expected?

Focus Management Group - PPP loan forgiveness

Key Takeaways from the PPP Loan Forgiveness Statistics (as of July 30)

When the May 2021 PPP loan forgiveness data was made available, we were surprised to learn the significant number of applications for forgiveness that had not been submitted to the lender and the SBA. As of May 24, 2021 the SBA reported that of the $521.2 billion of 2020 PPP volume, the amount of loans that had not yet applied for forgiveness was $159.1 billion.

With the July 30, 2021 data now available, the amount of PPP 2020 loans with forgiveness applied for has changed to:

  • $417.0 billion has been forgiven.

  • $23.7 billion is either under review or has not been forgiven.

Between May and June 2021 more PPP loans have applied for forgiveness, and the SBA has reduced the number of loans under review.

Focus Management Group - California proposition 12

Why does California’s Proposition 12 affect producers and processors outside of California?

Why does California’s Proposition 12 probably affect you? On November 6, 2018 California voters passed Proposition 12, known as the Farm Animal Confinement Initiative, with 62.66% in favor and 37.34% opposed. This initiative was to establish minimum space requirements (based on square feet) for veal calves, breeding pigs and egg laying hens. It also banned the sale of veal, pork and eggs from animals confined to areas below the minimum required space.

Prior to the passing of this proposition, California did have minimum space requirements based on animal movement rather than square feet, and California banned the sale of shelled eggs from hens confined to areas that did not meet space requirements based on movement. The existing requirements were passed as Proposition 2 in 2018 and went into effect in 2015.

California has 40 million residents and represents 15% of the US pork market.

What timelines did Proposition 12 establish? What is the economic impact of Proposition 12?

Focus Management Group - Personal consumption expenditure index

Is the Personal Consumption Expenditure Index (“PCE”) a better measure of inflation?

How can a business respond to inflationary fears? It is difficult to ignore the mounting fears of inflationary impacts on consumers and businesses. The alphabet soup of indicators includes at least the CPI, PPI, and PCE.

The Federal Reserve (“Fed”) announced at its January 2012 Federal Open Market Committee meeting that the PCE would be the primary measure of inflation the Fed will use to assess the level of inflation in the economy. While the CPI is regularly quoted, the PCE does not achieve the same level of notoriety.

The CPI represents a basket of goods and services that urban consumers would buy without making substitutions when prices change. The PCE includes a broader range of goods and services than the CPI, and the PCE uses a broader range of buyers. The PCE attempts to track what is actually purchased and incorporates buying pattern changes when prices change.

The Fed believes using the PCE leads to a smoother and typically lower level of reported inflation.


bottom of page