utsa sbdc covid business recovery accelerator · clear picture: all ppp loans over $2 million in...
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UTSA SBDC COVIDBusiness Recovery Accelerator
COVID Business Town Hall
Preparing For the Paycheck Protection Program Loan Forgiveness
https://txsbdc.org/businessrecovery/
(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: [email protected]
www.synerlock.com
LinkedIn: Linkedin.com/company/synerlock
UTSA SBDC COVIDBusiness Recovery Accelerator
COVID Business Town Hall
https://txsbdc.org/businessrecovery/
(210) 458-2272