Bulletin Board Magazine 2020, Volume 2

Payroll Protection Program

The LastWord on the Payroll Protection Program…WELL AT LEAST IN 2020! by Bill McNamara CPA, CCIFP ® ,The Curchin Group, LLC

William C. McNamara CPA, CCIFP ® The Curchin Group, LLC

If you are reading this, congratulations on surviving. 2020 is the benchmark of change and chaos highlighting that survival and success favored those prepared. The PPP loan program saw the issuance of more than 4.9 million loans to small businesses around the U.S. Many business owners may be numb about the news and latest revisions impacting this loan program. So, I am not going to spend any time talking about the history, rumors, promises and supposed fixes; rather we will just highlight some key concepts and considerations. Bear in mind, this article is being drafted prior to November 3, 2020. What changes will we see between then and Wednesday, January 20, 2021? This article will not speculate on a subject with such a large margin of uncertainty and unpredictability.

• 24 weeks - not 8 weeks – that’s your spend period for the funds received. You may spend that on payroll or other qualified expenses like rent and interest. Your mix is 60% payroll and 40% other. o A planning point and an option to consider - calculate the full payroll you expended over the 24-week period. If you have enough eligible payroll costs, document that and keep the support for the other charges in case of audit or disqualification of payroll incurred. This sets up a plan B should you • The amount of loan forgiveness is discounted by two calculations. First is a determination if your businesses have less average weekly full-time equivalent employees measured during the applicable periods. Second, the loan forgiveness application will test whether full-time salaried employees absorbed more than need to appeal or provide additional documentation for loan forgiveness.

a 25% pay decrease during the covered periods. Pass these two tests and you have spent the finding dollars according to thresholds above and the loan is 100% forgiven. o Both calculations require some math and a good spreadsheet.

Visit this AICPA website for a free detailed worksheet: https://www. pppforgivenesstool.com/

• What type of documentation is going to be required? Think in the terms that more is best. Each lender will provide their own interpretation of what they wish to see but never hesitate to go beyond. This is not an exercise of limiting scope or questions, rather this is an exercise to overwhelm and eliminate any vagueness of doubt. Build a time capsule in case the Small Business Administration comes calling in the future. Memorialize key management decisions and thought processes, memories fade. Pack it away in a safe space.

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