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Landing, Using and Gaining Forgiveness for Government Relief

Recently, Petra Coach presented a webinar, “Government Relief Guidance: How to Use, Gain Forgiveness, and Possibly Land Additional Funding for your Business” with Certified Petra Coach David Pierce.

If you’re a business leader, you need to see this.

You can find the full recording here.

To augment the recording, we noted takeaways and tips from the presentation. Click HERE to download the slides from the session. You can also access all mentioned resources below:

AICPA PPP Forgiveness Calculator

Main Street Lending Comparative Examples Calculator

Main Street Lending FAQ’s

MSELF Term Sheet

MSNLF Term Sheet

MSPLF Term Sheet

PPP Loan Forgiveness Application

 

Top Takeaways

As of this morning, Forbes stated that $150 billion is still left in the CARES Act program. People can still apply and get the loan.

PPP vs. EIDL

Differences for the EIDL:

  • No personal interaction
    • Online application
    • Money received through DocuSign & shows up in your account
  • 30-year loan
  • Easiest loan

Tip: Put these funds into a separate bank account and use them for costs outside of the PPP guidelines.

  • All forgiveness requests will be subject to audit.
    • Likely by your banker
    • Be prepared for this and assume you will be audited
  • Put the funds in a separate account & keep track of what you have spent the money on.

Tip: In order to not have to change ACH accounts, transfer money from the new separate account into your operating account, and then pay out your payroll or rent. Still keep track of what you’ve spent and where it goes.

Allowed Expenses

PPP provides 8 weeks of coverage for “allowed expenses” – only use the PPP funds to pay for allowed expenses.

Examples of allowed expenses:

  • Payroll
    • Includes hazard pay and bonuses
    • At least 75% must be used for Payroll
  • Mortgage Interest
  • Rent
  • Utilities

A benefit if you don’t choose the Alternative Payroll Period is potentially payment for more than eight weeks of expenses.

If you applied for EIDL and received the money but don’t want to use it, you can keep it, but the grant is deducted from the forgiveness amount.

Pay Requirements

You much maintain at least 75% of EACH employee’s salary or forgiveness reduction will occur. 40+ hours creates a Full Time Equivalent (In the case of overtime, i.e. 60 hours for one employee, it still counts for 1 FTE). If you tried to bring someone back and they won’t come back, you need to have documentation of the offer and notify the state for them to count as one of your FTEs. If an employee leaves during the 8-week period, the employer doesn’t have to count that as a reduction in their FTE count.

Best Practice: Track all extra expenses that the pandemic has cost your business – even time spent

Requesting Forgiveness

  • Apply to your lender for forgiveness
  • Comply with any audit documentation requests
  • Up to 60 days for forgiveness approval

Even if you don’t need the money now, still get it because you may need it later on. Cash is King, so prepare for liquidity needs before you have them.

Contractor payments will not be forgiven because they have the ability to apply for PPP funds themselves. However, temp employees still count if they are on payroll.

Right now the period is set at 8 weeks but this could change because it’s not fair for businesses that weren’t allowed to open. We will have to wait and see if they extend this. We think it’s likely they will, we just don’t know when.

 

Like what you see? Reserve your spot for our next webinar HERE.