Paycheck Protection Program (PPP)

Here’s the best summation I’ve seen:

If I have an employee who turned in her notice a month ago and her last day was 03/27 do you still qualify?

Heather-

I’m not seeing anything related to PPP disqualifying participation because an employee resigned. Keep in mind that the program looks at overall employee counts. Depending on the reason for the resignation, be aware that there may be some issues realted to the updated FMLA.

Thanks to all who posted attachments with info on the PPP loans. I’m trying to calculate the amount of the loan that our practice is eligible for. I need some clarification on a few things:

  1. Some documents recommend using the average monthly payroll for 2019 and other documents say to use the 12 months prior to the loan origination. I’m not sure which to use; I’m going to calculate both ways for now.
  2. How do I exclude an employee that makes over $100K annually. Most documents say to excluded that salary, but the document that someone posted from BioTek Labs states that • Salaries over $100,000 per year will be calculated at no more than $8,333.33 per month. I’m interpreting that we can included $100K for any employee that has a salary over $100K. (Not unless I’m reading it incorrectly);
  3. How do I calculate the loan foregiveness amount. I’d like to use $$ instead of FTE. I could not find any documentation that was clear on this calculation.

Thank you,
Lynn

Lynn-

This is the tricky part…you have to look at the salaries over a period of time (March 2019 - Feb 2020 is what I am using). Determine your total pay during that time for each employee. You will need to cap anyone who got paid over $100k. So, if Dr. Smith made $150,000, only use the first $100k in running the calculation for the maximum loan amount. It’s a bit confusing but the $100k seems to be a hard limit that has to be taken into account…

-Paulie

If the partners of the business are not salaried employees, and the business is a partnership, can we use loan funds to cover the distributions to partners or only for salaried employees?

Paulie - Thanks for the info!

Here is an additional CARES Q & A with good information and answers.

Small Business Owners Guide to the CARES Act final.pdf (187.2 KB)

Hi Kathy - Thanks for the link. It’s a google doc. I was not able to open it without permission.

Lynn

Has anyone found a worksheet to calculate loan eligibility amount and foregiveness amount. I looked on the SBA site but I could not find anything.

Without a detailed understanding of the business structure, it’s hard to give an answer to this scenario… That’s a nuance I’ll have to defer to your accountant.

Sorry Lynn- I should have it fixed soon!

It is fixed

Small Business Owners Guide to the CARES Act final.pdf (187.2 KB)

1 Like

Kathy - Thank you!!!

Thanks, this is a blessing to our practice.

I saw this too. It gives us time to cut now when we need to but adjust in a couple months and still be eligible for the forgiveness.

Kathy. Thanks. Great document. Very helpful.

Can someone direct me as far as the PPP application process? I only see the EIDLA application on the SBA website. Are the lenders for PPP associated financial institutions?
Thank you!

PPP applications are managed via the bank. I’ve talked with 4 bankers from around the country and they all said the same thing:

  1. Legislation was approved on Friday
  2. Today they are reading the rules, etc
  3. Tomorrow and Wednesday they will be training processors and their bankers

All this to say is that they keep “banking hours” and didn’t look at anything over the weekend. Few more days and they will be up and ready. Some of the bankers said that they will ONLY be servicing banks that they have existing relationships with. Start with your current bank and go from there…

I emailed the small business division of PNC (where I currently bank) and got a email today requesting documents. I spoke with someone yesterday who said they had no idea how they were handling things.