DEADLINE TO FILE FOR PPP LOAN

Last day to apply to receive a PPP loan is June 30th!

Although the statutory language is a bit murky, a June 8th joint news release by Treasury Secretary Mnuchin and SBA Administrator Carranza said the SBA and Treasury will provide rules to “confirm that June 30,2020 remains the last date on which a PPP loan application can be approved.”

(Please note that this is referring to getting a PPP loan, not getting your PPP loan forgiven)

If you have not yet received your PPP and you want to, you need to start the process with your bank ASAP!

PPP Forgiveness Update

We are hopefully getting more clarity regarding forgiveness of the PPP loans.  However, many businesses are getting close to the end of your 8 week period, and action is needed soon.

Our overarching advice would be:

  • Plan out your spending for the 8 weeks.  Be intentional about how you spend the money so that you get the maximum possible forgiveness.  (By the way, see below – the bill in Congress would extend the 8 week period)
  • Be in touch with your bank.  The forgiveness application will be done through the bank that issued the PPP loan.
  • If it is looking like some of your PPP will not be forgiven:
    • Wait.  There is currently a bill in Congress (as of 6/3/20, it has already passed the House and it is in the Senate) that will ease the rules.  Our reading of this bill will be that it will solve many of the gotchas that have been keeping our clients from receiving full forgiveness.
    • Get in touch with us.  The forgiveness application is confusing, and if you have any complexity in your situation at all, it may be difficult to apply the rules correctly.  There may be something that you are overlooking that would fix the issue.

PPP FORGIVENESS

Information regarding the PPP and its forgiveness is coming out daily.  The best place to keep up to date on the most current rules is here:  https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

PPP Forgiveness Application

The SBA has now released the PPP loan forgiveness application.  This is not only the application, but also includes guidance for small business people regarding the forgiveness period, FTEs, etc.  If you have any questions, please contact your CPA here at Loggins anytime.  If you are not a client of ours, please feel free to reach out.  We offer a one time hour long consultation to see how we can assist you with your tax and accounting needs.

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

UPDATE – PPP LOAN

Newest details of the PPP loan:

  1. Although the government funding ran out earlier, the President signed additional funding into law today (4/24/2020).  If you have applied for the PPP or the EIDL and were told that there was no more funding available, please check back with your bank.
  2. If you are an independent contractor (i.e. you are not paid through a W-2) or self-employed, you could be eligible for the PPP even if you do not have employees of your own.  Check with your bank about applying for the PPP for the self-employed, or get with your CPA.
  3. We are starting to receive information about what will be required for the forgiveness of the PPP loan:
    1. The critical period is the 8 weeks starting the day the funds are received.
    2. The application for forgiveness of the PPP loan must be filed with the bank where the loan was funded
    3. The most that can be forgiven to any one employee is $15,385 (If you are Self Employed with no employees you count as the one employee)
    4. It is suggested that you open up a separate checking account to track the funds.  You will need to provide support for how the funds are spent.
    5. Interest will start the date the loan is funded.  Any unforgiven portion will have interest.
    6. If your number of full time equivalent employees go down during the 8 weeks, or if your salary is reduced by more than 25%, then the forgivable portion will be reduced.
    7. At least 75% of the funds must be on payroll costs.  The remainder can be spent on rent, mortgage interest or utilities.

 

More information regarding the PPP forgiveness will be coming out at a later date, and so this information is subject to change in the future as more guidance comes out.  Please check our blog for the most up to date information: https://www.logginscpa.com/blog/