5/15/2020 Outsourced Experts In: • Financial Management • Accounting & Payroll • Full Charge Bookkeeping Presentation For About Us Marino Advisory Group (MAG) is a Veteran owned and operated business founded with small to mid-size business leaders and owners in mind. We specialize in businesses that require outsourced assistance in: - Financial management - Accounting operations - Bookkeeping - Payroll (effective July 1, 2020) - Business management and operations support 1
5/15/2020 CARES Act Facts: • CARES Act / Payroll Protection Program - life line to small to mid size business • Released in record time to get funds in company hands to remain solvent • Many questions left unanswered or undefined at time of release • Rules and definitions change daily and will likely continue to change • Info presented herein is based on our interpretations of current guidance Agenda: How to Estimate Your Paycheck 1. Protection Program Loan Forgiveness Amount 2. Limitations on PPP Loan Forgiveness 3. Benefits of Rehiring and Paying Your Employees Q&A 4. 2
5/15/2020 Loan Forgiveness Requirements: Keep track of expenses (payroll, mortgage interest, rent, utilities). Ensure loan proceeds are used for authorized expenses. Consider holding funds in a separate account. Maintain proper documentation through the 8-week covered period. Calculator to estimate your PPP Loan Forgiveness: Start with the following - Loan Amount • Payroll Costs For the Covered Period • Mortgage Interest, Rent & Utilities: Up to 25% Forgiveness • Estimate Amount Eligible for Forgiveness Prior to FTE • and/or wage/salary calculation 3
5/15/2020 Calculator to estimate your PPP Loan Forgiveness (Con’t): Adjustment for - Average Full-Time Equivalents (FTEs) per month during • the covered period Average FTEs per month for Comparison • Percent of loan principal that must be paid back due to • FTE reduction Decrease in Wages greater than 25% • Adj for amount of EIDL Grant under CARES act • Calculate - Amount of loan principal that may be forgiven • Amount of loan principal that may be paid back • Example - Payroll Loan Amount $ 500,000 Promisory Note Date: 4/14/2020 (Funded 4/15) Totals Payroll: gross with taxes 320,000 > $100k (16,000) foreign ee's (8,000) Benefits: Healthcare 70,000 Dental (TBD) 1,000 Workers Comp (TBD) 12,000 Life Ins. (TBD) 4,000 401(k) 4,000 (> 75%?) Total Payroll Related 387,000 80.79% 4
5/15/2020 Example – Non Payroll Rents: Main Facility 20,000 Monthly Storage (no lease) - Utilities: Gas 14,000 Electric: Nat'l Grid 20,000 NYPA 8,000 Constellation 16,000 Water - Phone/Internet 2,400 Interest: Note Payable 2,000 Equipment 1,600 Bank Operating Line ??? 8,000 Total Other Allowable 92,000 Example – FTE TOTAL ALLOWABLE EXPENDITURES 479,000 Avg. FTE during 8 weeks 60 85.71% Jan/Feb 2020 avg head count 70 Forgiven 410,571 Loan $ 89,429 5
5/15/2020 Documentation Payroll Reports to support weekly payroll Payroll records may be useful in FTE calculations Copies of Invoices and canceled checks for other expenditures Copies of contracts for rents Copies of loan agreements for debt (interest) Note: Each lender may require slightly different documentation Benefits of Rehiring Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining wages paid. Forgiveness will be reduced if FTEs declines, or if salaries and wages decrease during the covered period. 6
5/15/2020 Benefits of Rehiring If FTEs and/or wages paid decline, you'll owe some money back. The same is true if salaries and wages decrease more than 25% for any employee making under $100,000. … What to Expect from Your Bank? … And Lastly, NONE of this may matter, because the banks are going to make the rules, and they don’t know what the hell they’re doing. Tony Nitti, Forbes.com 7
5/15/2020 Q & A Please Contact: Rochester Market Harry Marino III, MBA (585) 943-6740 Buffalo Market Wayne Wawrzyniec (716) 799-3119 www.marinoadvisorygroup.com 8
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