Our top priority at this time is ensuring that all clients eligible for the PPP loan are able to apply for and receive these funds.
If you are struggling in any way with this process, please reach out to us. We can assist you with pulling documents needed by the lender; furthermore, if you are struggling to find a lender, we can assist with putting you in touch with lenders who are participating in the PPP program.
For those of you who have already applied and have been approved (lucky you!!) or are awaiting approval, here is what you need to know to prepare for what’s next:
- You have eight weeks from the date of funding to spend these loan proceeds on qualifying costs of which a minimum of 75% must be payroll costs.
- Qualifying payroll costs include wages, commissions, salaries, vacation, group health benefits and premiums, retirement benefits, state and local employer taxes, and family, medical and sick leave (other than paid leave under the FFCRA).
- Other qualifying non-payroll costs include rent, utilities, and interest on mortgages on real or personal property (on loans that were incurred before 2/15/2020).
- Payroll costs do NOT include paid sick or family leave paid under the FFCRA for which a payroll tax credit is claimed, compensation to employees who reside outside of the US, and compensation in excess of $100k for any individual.
- For the cleanest forgiveness trail, we recommend that the PPP funds be deposited into a separate bank account away from the operating and daily depository activity. If your lender is required to deposit the proceeds into one of your existing accounts, you can transfer (in the exact dollar amount) the PPP funds into a new account established for this purpose.
- Know your target dollars for payroll and non-payroll costs – remember a minimum of 75% of loan proceeds must be used on payroll related costs.
- Over the next eight weeks, as you pay for these eligible costs, you will transfer cash in specific increments to your operating and payroll accounts to pay these costs.
- We will be offering a PPP Expense Tracking worksheet for your use – more to come early next week. You will maintain this worksheet to include details of each expense paid using the PPP funds.
- Additionally, we recommend creating a PPP Expense Tracking folder on your network where you will scan and save PDF proof of every expense paid (copy of invoice, payroll summary reports by pay period, and copy of bank statement showing the cleared check or cleared ACH).
- Finally, determine your baseline FTE’s for the following periods (many of your payroll companies provide a report to allow you to pull this very easily). If you need help with this, please let us know.
- 2/15/19 through 6/30/19
- 1/1/20 through 2/29/20
We won’t rest until all of our eligible clients have received funding and are well on their way to forgiveness, so stay tuned for further practical guidance in the days and weeks to come!
- The Concannon Miller Team