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Important Updates to Paycheck Protection Program (PPP) Loans

2020 -04/01

The Treasury Department and the SBA continue to release new and important information regarding the Paycheck Protection Program (PPP) loans.

The Treasury Department has released two important resource guides:

  • Top-line overview of the program Click Here
  • Paycheck Protection Program (PPP) Information Sheet for Borrowers Click Here
  • Sample Loan Application Click Here
  • Link to the U.S. Department of the Treasury website for Assistance for Small Businesses Click Here

What should employers do to get ready for the loan application process? While the banks are still trying to get exact guidelines from the SBA regarding the documentation required for the PPP loan process, we have developed the following recommendations:

  • Have copies of your originally filed 2019 W-3, W-2s, 941s, 940, TWC reports and 1099-Misc for Non-employee compensation ready if required by the lenders.
  • We are recommending all employers with 500 or fewer employees consider applying for this program. See the information sheets from the US Treasury Department referenced above to see who qualifies.
  • If you have more than one business entity or affiliated entities, each with its own Employer Identification Number and those entities have paid compensation, each entity should make its own PPP loan application.
  • If you have registered for the SBA Economic Industry Disaster Loan (EIDL) that provides a $10,000 grant, you may be required to certify that those funds were not used for payroll purposes.
  • The PPP Loan application asks for the number of Jobs. We interpret this to mean the number of employees. At the current time, the lenders are trying to verify if this is the total number of employees or the number of employees on a full-time equivalent basis. And as of what date? We hope this clarification should be available from the SBA or Department of the Treasury later today or tomorrow.
  • Estimate your Average Monthly Payroll by following the instructions as provided by the Department of the Treasury. Instructions can be found on this document (Click Here)
  • We understand payroll processing companies may be proving reporting for this purpose. Please contact your payroll provider for these numbers.
  • Be aware that the language in the Employer’s Reference guide referenced above, contains language that 75% of the PPP Loan proceeds must be used for payroll. Stated another way, it is anticipated that not more than 25% of the forgiven amount may be non-payroll costs. This will be important when considering how the funds are utilized and when you consider bringing furloughed or laid off employees back to work.

We have received guidance from lenders that there may be more demands for the PPP loans than there is funding available. In addition, the Secretary of the Treasury has stated today that the $350 Billion of funding for the PPP Loan program may not be enough and he may need to go back to Congress to request additional funding. (Click Here)

Bland Garvey is recommending to all clients that think they may benefit from the PPP program to immediately contact their bankers and start the loan process as soon as the lenders make the applications available. 

As a reminder, Bland Garvey will be available to support our clients in their efforts to obtain information needed for the loan application. The borrowers will be responsible for completing and submitting the loan application and will be required to certify they are submitting true and accurate information.

Call volumes at our office are very high at the current time. We encourage you to call our main number at 972-231-2503 and schedule a consultation if you need assistance with the loan process.

©2020 Bland Garvey CPA