Below is an April 13th update for the CARES Act. We know it can be frustrating when we do not have all the information but we will do our best to stay on top of the latest and greatest for you guys and keep you up to date. Stay healthy and we look forward to discussing this further with you.
1. Second quarter 2020 estimated payments are now extended to July 15 along with the first quarter.
2. Updates on the Payroll Protection Program (PPP) SBA Loan
Make sure you are using it for the items you attested to within your loan document. Items you can use it for and apply for forgiveness (in place prior to February 15)
• Payroll and related benefits
3. The forgiveness period starts when you receive your funds from the PPP loan and goes over the next 8 weeks.
4. If you have less employees, there is a calculation that will need to be done to decrease the amount eligible for forgiveness. This loan program is an attempt to assist employers enough to retain their employees and continue to pay them during this difficult time.
5. It may be easier for tracking to have your PPP loan funds in a separate account.
6. When using the PPP loan proceeds save the invoices for utilities, statements for debt payments, copies of cleared rent checks and payroll reports over that 8 week period. The bank is not responsible for tracking these items for you but they will need them for the loan forgiveness process. We would be happy to help our clients with this part of the process to hopefully increase the chance of forgiveness.
Whatever portion of the loan is not forgiven is then payable over 2 years at 1% interest but no payments are due for six months although interest will accrue. There are no prepayment penalties on this loan.
7. We are still expecting guidance on self employed individuals and how this all works when there is no payroll or the self employed individual is not on the payroll of the company.
Please let us know if you have questions or concerns. Stay well!
