utsa sbdc covid business recovery accelerator · clear picture: all ppp loans over $2 million in...

UTSA SBDC COVIDBusiness Recovery Accelerator

COVID Business Town Hall

Preparing For the Paycheck Protection Program Loan Forgiveness

https://txsbdc.org/businessrecovery/

businessrecovery@utsa.edu

(210) 458-2272

Disclaimer

This training is brought to you by the South-West Texas Border SBDC Network as a public service. It is not designed as a substitute for legal or tax advice, nor is it a comprehensive statement of the law.

Housekeeping

• Please mute your computer or phone

• Questions will be answered at the end of the presentation

• Use the chat box to submit your questions

• Please complete the surveys that will be emailed after the presentation

• Next COVID Business Town Hall June 9th –registration coming soon!

UTSA SBDC COVID Business Recovery Accelerator

Our vision for this program is to help small businesses through Relief, Rebooting, Recovery and Resiliency during and after the COVID-19 pandemic.

Supports a 79-county SBDC Network covering the

following areas:

• San Antonio• Alpine• Austin• Corpus Christi• Eagle Pass

• El Paso• Laredo• Rio Grande Valley• San Angelo• Victoria

Services provided include training and business advising to small businesses on:

– Funding

• Paycheck Protection Program (PPP) loans

• SBA Economic Injury Disaster Loans (EIDL)

• SBA and non-SBA loan programs

– Employer Resources

– Cybersecurity

– Workplace Safety

PPP Loan

ForgivenessPresented by Rebecca Schultz

www.synerlock.com

www.synerlock.com

www.synerlock.com

Current

Situation:

More than 4.3 million small businesses have taken over $500 billion in Paycheck Protection Program (PPP) loans

Roughly $100 billion remains available through the PPP loan program

SBA Loan Forgiveness Application released May 15th

Millions of small businesses will be filing for relief under the forgiveness process through their PPP lenders

Submission of the forgiveness application begins after June 30, 2020

www.synerlock.com

Clear Picture:

All PPP loans over $2 million in size will be audited

SBA will be doing a random audit of loans under $2 million in size

Borrowers required to hold onto documentation in connection to SBA loans for 6 years

PPP lenders will be processing massive amounts of documents in a limited amount of time

Responsibility and liability connected to improper use of funding carries penalties and falls on business owner(s)

www.synerlock.com

Importance of

Getting this

Right:

Penalties for not adhering to the forgiveness guidelines are stiff

Massive amounts of unforgiven debt can add strain to already weakened businesses

Government guarantees to PPP loans important to banking system

Economy is depending on businesses to coming back strong

We MUST get this right!

www.synerlock.com

New Details:

11-page forgiveness application provides new terms and timeframes for use in calculations

Ability to calculate reduction in forgiveness

Some flexibility on timeframes for use in 8-week (56 days) coverage

Clear safe harbor definitions and guidelines

www.synerlock.com

Definitions:

Covered Period:

Eight weeks (56 days) starting the date

borrower receives PPP funding

Alternative Covered Period:

For bi-weekly (14 days) or more

frequent payroll periods business

owners can opt to co-inside covered 8

weeks (56 days) within payroll cycles

starting the next payroll period.

Reference Period:

January 1, 2020 to March 31, 2020 –

Timeframe for pre-disaster wage and

FTE consideration and comparison

www.synerlock.com

Definitions:

Accrued Expenses:

Costs (such as wages) that fall between

covered timeframes, that might require

additional calculations and/or

documentation

Average Full-time Equivalency (FTE):

Calculation provided for review of full-

time employee headcount; number of

hours paid per week divided by 40

rounded to nearest 10th max per

employee capped at 1.0

Salary/Hourly Wage Reduction:

Calculation completed for each

employee with salary/hourly wage

reduction reduced more than 25%

during covered period or alternative

covered period compared to reference

period.

www.synerlock.com

Definitions:

Safe Harbor:

FTE safe harbor allows business owners

to avoid penalties for non-returning

employees if they document and justify

unfilled position due to 1) employee

refusing to return when written offer

provided, 2) fired for just cause, 3)

employee resignation.

Salary Hourly Wage Reduction safe

harbor allows for business owners to

avoid penalty should annual salary or

hourly wages be adjusted within 25% of

reference period wages by June 30,

2020.

www.synerlock.com

Documentation:

Payroll:

Bank statements, payroll processing records, proof of how much you paid each employee (down to detail of number of hours worked each week), payroll tax filings (941), state and local taxes (copy of filings), proof of employer contributions (canceled checks, receipts, statements)

Non-payroll:

Mortgage interest: Lender amortization schedule, receipts, canceled checks, lender statements for 1 month after covered period ends

Rent: Copy of lease agreement, receipts, canceled checks, or lessor accounts statements from February 2020 through 1 month following end of covered period

Utilities: Invoices/bills starting February 2020, canceled checks, account statements verifying eligible payments

PPP Application and all support documents used in connection to the PPP loan

www.synerlock.com

Sample Forgiveness Application

www.synerlock.com

What you need

before you start:

Calendar

Calculator

PPP loan contracts, application & pre-disaster support documents

Post PPP funding support documents

Patience

www.synerlock.com

Reviewing Wages & FTE Totals:

www.synerlock.com

Completed Application

www.synerlock.com

Schedule A Worksheet FTE

www.synerlock.com

Schedule A Worksheet

www.synerlock.com

Schedule A

www.synerlock.com

Completed Application

www.synerlock.com

Review of

Future Loan:

$12,507.78 unforgiven

Loan at 1% over 24 months

$530.00 payments starting October 29, 2020

www.synerlock.com

Things to

Consider:

Penalties

Safe harbors allow much needed

support and flexibility

You MUST be conscious of spending and

documentation

Anticipate an SBA audit

www.synerlock.com

Need More?

Rebecca Schultz

Founder/Executive Loan Consultant

Synerlock Corporation

Email: rschultz@synerlock.com

www.synerlock.com

LinkedIn: Linkedin.com/company/synerlock

UTSA SBDC COVIDBusiness Recovery Accelerator

COVID Business Town Hall

https://txsbdc.org/businessrecovery/

businessrecovery@utsa.edu

(210) 458-2272