2nd PPP loan qualification and Provider Relief Money

Hi Everyone,
Happy Friday and Good Morning.
Desperately need some advice.
We are missing the 2nd PPP loan by 0.32%. We are not meeting the requirement of 25% revenue reduction in a given quarter due to the Provider Relief Fund money we received. I know the Provider Relief money from HHS is taxable and considered as income but it is not an income from seeing patients.
Could I file for the 2nd loan without that HHS Relief money in the application but also upload the bank statements to show that we did receive the HHS Relief money and then leave it to the bank and SBA to decide whether they will give me the loan or not?

My deadline for filing is Tuesday 3/9 as we have less than 20 employees.

I would really appreciate any feedback you all have. My accountant is also not sure and wants me to check with our bank and with the Forum.

Thank you all very much. Have a wonderful weekend and stay safe.

Piyali Srivastava.

I am having the same issue and my bank and accountant haven’t been able to answer the question about HHS fund. Thanks for asking, I hope someone can help!

Yes Dr. Miller I do need some help on this. Our deadline for submitting application is 3/9/21. I left a voicemail with my bank too but never heard back.

As we understand it, it is when you get the loan, so if you got it in may that quarter uses that money, not every quarter. We were down 30 percent in 4th quarter and qualified. it’s unfortunate but with the money it evens us out. The money was placed within 24 hours of applying.

The revenue calculation does not include proceeds from your first PPP loan.Your company’s gross receipts (also called “revenue”) includes all revenue in whatever form received or accrued (in line with your business’s accounting method), from whatever source. This includes any of the following (reduced for any returns and allowances):

  • Sales of products or services
  • Interest or dividends
  • Rents
  • Royalties
  • Fees or commissions

The revenue calculation does not include the following:

  • Proceeds from your first PPP loan
  • Net capital gains or losses as reported on IRS tax return forms
  • Taxes collected for and remitted to a taxing authority (such as sales or other taxes collected from customers)
  • Proceeds from transactions between your business and your affiliates
  • Amounts collected for another (e.g. travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder, or customs broker)
  • Proceeds from your first PPP loan

Thank you all for your replies.

I don’t think people are reading this question correctly. The initial question is about whether you have to count the money you received via the Provider Relief Fund- a grant that does not have to be paid back- given by the DHHS to practices by who see Medicaid patients to try to keep them in business. The question is not about whether to include $ from the first PPP loan.
Our practice is in a similar predicament. We received money from the Provider Relief Fund and therefore aren’t quite 25% down for the quarter that comes closest to qualifying. If we have to count this PRF money as income, we are down only 23.5% and do not qualify for PPP Round 2 (which requires business to be down 25%). If we don’t have to count this PRF money, we are down 29% for the quarter and easily qualify for PPP Round 2.
Can anybody answer that question- do we have to count the Provider Relief Fund money?
Ben Meares, MD

You are right Dr. Meares. That was exactly my question too.

Please note that the March 9 deadline was related to businesses with less than 20 employees- allowing them access to apply and not get pushed aside by larger applications. Everyone has until March 31 to apply…

Thank you Paulie. We filed before 3/9 and now waiting.

HHS PRF money is considered “gross receipts” for purposes of the PPP loan.

From the SBA: https://www.sba.gov/sites/default/files/2021-01/Second%20Draw%20PPP%20Loans%20--%20How%20to%20Calculate%20Revenue%20Reduction%20and%20Maximum%20Loan%20Amounts%20Including%20What%20Documentation%20to%20Provide%20(1.19.2021).pdf :

Gross receipts for a for-profit business “carry the definitions used and reported on IRS tax return forms.” (Q1) Forgiven first PPP loan and EIDL advances are not taxed (Q2), and so it’s OK to exclude those. But PRF money is definitely taxed. So you have to include it.

Some folks say “well, but it wasn’t from patients.” That’s not relevant for the PPP. Unlike with the PRF, PPP doesn’t care whether it’s your core business revenue vs. ancillary revenue from rent/interest.

I know this is disappointing :frowning: