For those of you who aren’t sure if you should be getting a PPP loan, the door closes on June 30. Many larger banks have already closed the door, and we’re seeing many smaller banks starting to limit it as well.
There are a number of clarifications that we’ve gotten on PPP since my last letter.
In general, we’re recommending everyone opt to take the 24 extension versus the 8 weeks if your lender asks you. For most of our clients, this should allow us to use payroll almost exclusively as a basis for forgiveness, which is generally far easier to work with.
The new rules clearly say that if an employee makes over $100,000 a year, that maximum for a 24 week covered period is now $46,154. Put simply, if an employee makes over that amount in the covered period, we use the $46,154.
Owner/Employees are a little trickier under new rules. The maximum amount of loan forgiveness for an owner/employee is based on 2.5 months or $20,833 The amount cannot exceed what the owner/employee received in 2019.
If you are a sole proprietor or employee owner and we had previously instructed you to make sure you pay yourself or employee up to the maximum of $15,385, that amount is now $20,833.
The SBA has released a new PPP Loan Forgiveness Application form as well an EZ forgiveness form. We are not recommending that anyone rush to apply for forgiveness just yet! We believe that more action may be made at further simplifying this whole process. Anyway, neither lenders nor the SBA are accepting these applications yet.
Lastly, I’d like to say that the the SBA has finally gotten their head screwed on straight & relaxed many of the intimidating rules, but these last three months have been exhausting for myself, Paul and Karen, as we keep trying to keep up with the ever-changing rules & regulations.
As a client of mine said the other day….“I have never worked so hard for FREE MONEY!!”
Please let us know if you have any questions,