The Commish
Footballguy
Didn't see this thread until now....much better place for my question than the cesspool:
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Small Business Support Group (1 Viewer)
- Thread starter ericttspikes
- Start date
Tom Hagen
Footballguy
Consensus seems to be that you can furlough workers (allowing them to collect unemployment) and bring them back when the loan funds are received. The 8 week period to measure forgiveness starts at loan origination.
ericttspikes
Footballguy
Yes, I found an SBA Tier 2 phone number online, 877-641-8202. I got through in 2 minutes. We received our grant last week and haven't gotten the email about the portal set up or any loan info. I gave her our SBA application # and she was able to confirm we are "under review" and that everyone would eventually get an email if they will received a loan or are denied. Not great news, but it was nice to get some communication about it.
glvsav37
Footballguy
DA RAIDERS
Footballguy
this is what is happening at my work. no success yet, in obtaining a loan.
Nipsey
Footballguy
Applied for the EIDL April 3rd and haven't heard anything. Filled out 3 PPP applications and have gotten furthest with Kabbage in terms of being asked for different document uploads. Never have had to jump through so many hoops. Waiting for additional funding to come through to see how many more hoops they make me jump through.
I actually got this email yesterday from the first bank i applied with. Can't believe they didn't bother to proof read the thing.
I actually got this email yesterday from the first bank i applied with. Can't believe they didn't bother to proof read the thing.
The Commish
Footballguy
Thanks. I only ask because I have a friend in Ohio that said something on social media that didn't seem right to me. She's under the impression that she has to keep her employees or she can't apply for the funds. She's done just that (even though they are closed) and missed out on funds the first time. Isn't sure if she'll make it long enough to get access to the second round.
Golf Guy 69
Footballguy
Golf Guy 69
Footballguy
The SBA says it will forgive a PPP loan if all employees are kept on the payroll for eight weeks from the date funds are disbursed, and the money is used for payroll, rent, mortgage interest, or utilities. Companies should ensure that the funds are used for approved purposes in all cases.
Tom Hagen
Footballguy
https://www.forbes.com/sites/anthonynitti/2020/04/15/ten-things-we-need-to-know-about-paycheck-protection-program-loan-forgiveness/#7a65041d3291
There are questions that need to be answered.
Golf Guy 69
Footballguy
Loan Details and Forgiveness
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 1%.
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 1%.
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
This is a great article and addresses many of the questions I’ve had as it relates to the vagueness of the SBA’s forgiveness language.
#1 specifically is of significant impact.
Tom Hagen
Footballguy
If it’s that simple can you tell me with certainty:
Does rent include equipment leases? Does it matter if they are operating or capital?
Does rent include real estate taxes paid pursuant to a triple net lease?
Does self rental count?
Are qualified expenses paid with PPP funds tax deductible?
Are bonuses paid within the 8 weeks counted for forgiveness? What if they are paid to an owner or family member?
If an S Corp shareholder is the sole employee can his health insurance be used?
Do we need to reduce payroll costs by federal withholding and FICA taxes?
Chemical X
Footballguy
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Golf Guy 69
Footballguy
I will try to answer. No interest payments. And all payroll.
Chemical X
Footballguy
i am still calling customers to figure out their apps.
I just received my PPP $ in my business account Friday. On 5/4 I plan on hiring all of my employees back that are currently on unemployment. This is the earliest I can hire them as the jobsites we were working on are finalizing protocols to deal with Covid regulations and the work bans are being lifted. So I will have a gap of roughly one week between getting the PPP loan $$ and the date I will put my employees back on the payroll and off unemployment.
My PPP loan was based on 12 months of the prior years average payroll which was considerably lower than my present payroll going forward as we signed a 7 figure project back in January and are getting larger (construction). I should have no problem using up the entire PPP loan in roughly 6-7 weeks of payroll. I have a few questions I'm hoping someone can answer:
Can I have the entire amount of the loan forgiven if I keep the same amount of employees (or more) on the payroll starting a week after I received the PPP loan $$ and have a payroll that equals/exceeds the amount of the loan?
What if an employee refuses to come back to work or can't for whatever reason, can I hire another employee and be forgiven their wages in place of the former employee?
Is an employee not returning to work held against me and does the reason for their not returning matter ?
As the business owner can I include paying myself a weekly wage as part of the payroll based on my yearly salary and be forgiven that $$ as part of payroll expenses? I probably can hit the loan threshold in the 8 week span with or without doing this.
Is rental of a condo which is used strictly for lodging for work an expense that can be forgiven? I have been renting a condo since Jan. in Killington VT where the project is, about 60 miles for me so we stay up there most weeks to work. My lease runs out May 15 and then I have a townhouse that I am renting from May15 til October. Is the rent $$ for both forgiven?
Thanks in advance and the help many here have offered in answering questions is much appreciated as I have been lurking and learning a lot over the last few weeks.
My PPP loan was based on 12 months of the prior years average payroll which was considerably lower than my present payroll going forward as we signed a 7 figure project back in January and are getting larger (construction). I should have no problem using up the entire PPP loan in roughly 6-7 weeks of payroll. I have a few questions I'm hoping someone can answer:
Can I have the entire amount of the loan forgiven if I keep the same amount of employees (or more) on the payroll starting a week after I received the PPP loan $$ and have a payroll that equals/exceeds the amount of the loan?
What if an employee refuses to come back to work or can't for whatever reason, can I hire another employee and be forgiven their wages in place of the former employee?
Is an employee not returning to work held against me and does the reason for their not returning matter ?
As the business owner can I include paying myself a weekly wage as part of the payroll based on my yearly salary and be forgiven that $$ as part of payroll expenses? I probably can hit the loan threshold in the 8 week span with or without doing this.
Is rental of a condo which is used strictly for lodging for work an expense that can be forgiven? I have been renting a condo since Jan. in Killington VT where the project is, about 60 miles for me so we stay up there most weeks to work. My lease runs out May 15 and then I have a townhouse that I am renting from May15 til October. Is the rent $$ for both forgiven?
Thanks in advance and the help many here have offered in answering questions is much appreciated as I have been lurking and learning a lot over the last few weeks.
Chemical X
Footballguy
ive been referring people to bench.co for reading.....
https://bench.co/blog/operations/ppp-loan-forgiveness/
https://bench.co/blog/operations/ppp-loan-forgiveness/
Chemical X
Footballguy
If SBA registers loan you get a registration/loan number, guaranteeing your loan. From there you provide your signing and banking info and then you get docs ot esign. If you get SBA registered, figure +-5 business days to funding.
Nipsey
Footballguy
Thanks. If I do get this, being self-employed, what am i going to have to show to get the loan forgiven? The loan amount is basically 1/6th of my 2019 income. I have no employees so will it just be assumed that this is my salary? What else could it be?
Chemical X
Footballguy
ive been referring people to bench.co for reading.....
https://bench.co/blog/operations/ppp-loan-forgiveness/
Nipsey
Footballguy
This is what i don't understand:
"You are entitled to use the PPP loan to replace lost compensation due to the impacts of COVID-19. However, you are not entitled to use the full amount to replace pay. Eight weeks worth of your 2019 net profit will be eligible for forgiveness."
Isn't the loan amount basically 8 weeks of my 2019 net profit? Do i just show them my 1099 schedule C when it comes time to apply for forgiveness and that's it? They already have it.
Chemical X
Footballguy
so, if you are a sked c your loan was likely your 2019 profit divided by 12, times 2.5.
say 60k divided by 12=5 x 2.5 = 12,500. but forgiveness is only for 2 months or 8 weeks, which is 10,000. this is salary for forgiveness purposes. if you want the remaining 2,500 forgiven, you need to show you used it on mortgage interest, rent, or utilities expenses, but you must have claimed or be entitled to claim a deduction for those expenses on your 2019 Form 1040 Schedule C in order to claim them for forgiveness.
say 60k divided by 12=5 x 2.5 = 12,500. but forgiveness is only for 2 months or 8 weeks, which is 10,000. this is salary for forgiveness purposes. if you want the remaining 2,500 forgiven, you need to show you used it on mortgage interest, rent, or utilities expenses, but you must have claimed or be entitled to claim a deduction for those expenses on your 2019 Form 1040 Schedule C in order to claim them for forgiveness.
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Nipsey
Footballguy
Chemical X
Footballguy
see the rest of my answer above. remember, you are self employed. 75% rule doesn’t apply, IMO, based in guidance.
Nipsey
Footballguy
Ah ####. Can they just make the loan amount and the amount that will be forgiven the same number? They have my 2019 1040. Don't they already know what the amount forgiven will be?
Chemical X
Footballguy
Yes, but you need to apply for forgiveness. 100% can be forgiven i believe, but you need to use that 2500- for other expenses, if you have them. its on you, this isnt automatic.
Nipsey
Footballguy
Exactly when does the clock start with respect to loan foregiveness. My business is closed but we plan a partial reopening Monday May 4th with the hope it would be back to full employment june1st. Can I use the 8 weeks of payroll following june 1st for loan foregiveness period or does that start when I signed loan doc or recd funds? Tia
Chemical X
Footballguy
You must maintain the number of employees on your payroll.
Here is the calculation you can use to determine if you’ve met this requirement:
First, determine the average number of full-time equivalent employees you had for:
The 8-week period following your initial loan disbursement, (A)
February 15, 2019 to June 30, 2019, (B1)
and January 1, 2020 to February 29, 2020. (B2)
Take A and divide that by B1. Do the same with B2. Take the largest number you obtain. If you’re a seasonal employer, you must divide by B1.
If you get a number equal to or larger than 1, you successfully maintained your headcount and meet this requirement.
If you get a number smaller than 1, you did not maintain your headcount and your forgivable expenses will be reduced proportionately.
So the clock starts when monies deposited? I had 8 full time. Is their a definition of ft. Let’s say they were working 40 hours per work and I bring them back with 32 hours per week. I understand 75% of loan must be payroll.
Grahamburn
Footballguy
Chemical X
Footballguy
the sba did not define FTE, but prior guidance says an FTE works 30 hrs / wk. i am waiting for guidance on this. ask your lender if they know if an FTE is 30 or 40 hrs. then add up hours worked and divide by that for the periods above.stlrams said:
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Bossman
Footballguy
So my concern is justified today.
We're scheduled to reopen the store next week and one of my 4 employees is telling me that he can't return to work...
Since his wife works at the hospital and both his baby sitters are older and refused to watch the kids for fear of covid. Their mom is working in it all day so the fear is valid I suppose.
So my store will be open, I'm in need of this employee, but he's asking me to lay him off so he can stay home with the kids and collect.
Not really a "lay off" scenario. It's more like "I quit".
So if he doesn't work, doesn't get paid, I'm screwed on the PPP forgiveness.
And B; if I do him a solid and lay him off, doesn't that affect my unemployment insurance to the tune of a couple Grand?
DA RAIDERS
Footballguy
can you just pay him? out of the box thinking, but if you value him and the money is going to be forgiven, why not?
eta: if the business 'needs' the employee, i get it. he's either got to work or be replaced.
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Bossman
Footballguy
I've been paying him to stay home for 6 weeks. I think the loan only forgives 8 weeks.can you just pay him? out of the box thinking, but if you value him and the money is going to be forgiven, why not?
eta: if the business 'needs' the employee, i get it. he's either got to work or be replaced.
And Kinda doesn't seem fair for the other guys to have to work 40 hours while he sits home and gets the same.
DA RAIDERS
Footballguy
Chemical X
Footballguy
you want him back, he doesn’t want to come back, so he quit. hire someone new. you need to protect yourself as does he....guidance;
So, if you previously let employees go, consider rehiring them to meet your PPP loan forgiveness requirements. That means the employees must get off unemployment, as they would no longer be eligible for its benefits. If it’s not possible to rehire an employee, you can hire someone else to take their place. The PPP loan is forgivable when employers keep workers on payroll, put them back on, or hire new employees to take their place.
Grahamburn
Footballguy
If he's staying home for a qualified reason (looks like he is as there's nobody to watch his kids) he would be covered under the Families First Coronavirus Response Act and be eligible for FMLA. You can keep him on your payroll but will get tax breaks to cover his pay for up to 12 weeks.
fissure man
Footballguy
Posted this in the barbershop thread but thought some of you might find this interesting (or upsetting, not sure which)...
Grahamburn
Footballguy
I wish there could have been some kind of vetting process. I hope every company needing help received it in spite of others predictably taking advantage.
ericttspikes
Footballguy
I'm not an expert, but I believe they may have a difficult time proving the loan would be 100% forgiven and might not even qualify today under revised guidance from the SBA. Companies with good accountants probably can get around it, but it sounds like the company in question wouldn't be able to legally certify the need to take the PPP loan.
I got an email from Chase about our PPP loan a week after funding that laid out the updated SBA guidance and even asked us to consider giving the money back if we felt we didn't meet the criteria. I'd assume other lenders would also have the same directive but not sure. This doesn't apply to us as we have been impacted and can prove it. Here is the email. bolded is their emphasis:
We continue to work hard to prepare as many applications as possible for processing when the SBA begins taking new applications. However, the SBA recently issued new guidance that we want to communicate to customers whose application is in process as well as those who have already received funding.
The new guidance strengthens some of the language regarding qualifications for a Paycheck Protection Program Loan. Specifically, we would like to remind you:
1.When you applied you certified that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
2.You have the opportunity to withdraw your application if you do not feel you meet this criteria.
3.If you’ve already been funded, and you believe you do not meet this criteria, you can repay your loan by May 7, 2020 and the SBA will treat that repayment as being in good faith.
If you cannot certify and want us to stop processing your application or you want to return your funding, you’ll need to follow the instructions at the bottom of this email.
Read the Important Information below before you make any decisions.Please be sure to read the FAQ shown below in its entirety and, if necessary, consult with your counsel or advisor:
31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business's ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.
Lenders may rely on a borrower's certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.
Please remember that you also certified you understood that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.
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