If you are anything like us your head must be spinning with all of the information circulating around about the PPP.
Below I share a few thoughts and questions we think are important to reflect on prior to taking further action. There is speculation that the forgiveness provisions will change and be updated but nothing is set in stone.
The responsibility of applying for these loans, understanding them and seeking forgiveness will ultimately fall on you as the business owner. It is imperative that you spend time planning and strategizing so you do not end up with expenses you were not expecting as you fight out. Make sure to ask your lender and tax professional about your specific scenario to minimize surprises.
Once your loan is accepted by the SBA it needs to close within 10 days. The reason it is important to understand this is the 8 week period begins when the loan is funded. It would be a good idea to have a payday fall on the following day so you can maximize the number of paydays you can include. If you are biweekly, or have monthly commissions you want to think about how that will fall in your "8 week" forgivable period.
Employees are now getting an extra $600 a week on unemployment, it may not be easy to get everyone back to utilize as much of this loan as you had anticipated. It would be good to understand who will come back and if you pay a week arrears meaning they are paid for the work done last week, you could miss that week of forgiveness as you scale back up. Have a contingency plan.
75% of the forgiven amount must be payroll
If you do not bring back 75% of your employees (FTE) you can have your forgiveness reduced
What is the forgiveness based on? Is it when the weeks of work were performed, when the employee received the pay or when the money left your account?
Is there anything restricting you from increasing your pay or the pay of your employees to meet the criteria.
We understand that this email likely creates more questions than anything else but we think in this environment it is important to provide updates and thoughts as much as possible to help you make strong decisions during a challenging time.
Thank you all for your support, we will continue to be here for you. Have a great weekend.