Great news - Clients are reporting that they have received the funds from their banks for the Payroll Protection Plan Loans (PPP).
Now the next phase - figuring out what to do with funds. The regulations are clear in purpose - these funds are intended for payroll (75%) and the other 25% can be used specifically for Utilities, Mortgage Interest, or Rent expenses. Payroll costs generally include Gross pay, the employer's share Pa unemployment tax (or other state / local employer taxes if not PA), health insurance & retirement plan contributions. It is clear from reading several of the promissory notes (each bank has their own version) that funds must be used for these purposes or there could be adverse consequences. Forgiveness of the loan is tied specifically to these expenditures over the 8 weeks beginning on the day you receive your funds. It is also tied to having the an equivalent number of full time employees as prior to this pandemic.
So the first order of business is get all employees back on the books - both in terms of numbers and total pay. Next - track your acceptable expenses. We recommend setting up a separate 'class' in Quickbooks specifically for these expenses. You can then run a classified Profit & Loss statement to see the accumulation of costs by account. This will be helpful when you submit to your bank for forgiveness. If you're not sure how to do this - please reach out to Natalie @ ext 11 and she can assist.
There are still some questions and nuances regarding how this will actually work - SBA/Treasury guidance is anticipated sometime this week. For more information please visit these sites:
https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
Note - if you have not applied for this yet - there is still an opportunity to do so - please reach out to your bank.
Please let us know what we can do to help