ACT Small Business Paycheck Protection Program Presented by: - - PowerPoint PPT Presentation

CARES ACT

Small Business Paycheck Protection Program

Presented by: Lytkowski & Co., Inc. William M. Dutton, CPA, CFE wmdutton@lytkowski.com MDNA John Greene, President jgreene@flsales.com

WHAT IS IT?

➢ Provides small businesses (500 or fewer

employees) with funds to pay up to 8 weeks of payroll costs, including

➢ Salary ➢ Wages ➢ Commissions ➢ Tips ➢ Vacation ➢ Parental/Family benefits ➢ Medical/sick leave ➢ Health care/insurance

premiums

➢ Retirement benefits ➢ State and local taxes

assess on compensation

➢ Mortgages ➢ Rent ➢ Utilities

HOW MUCH CAN I BORROW?

➢ The maximum loan amount is the lesser of –

➢ $10 million, or ➢ Up to two months your average monthly

payroll costs from the last year plus an additional 25%

➢ The March 31, 2020 SBA materials state that

the formula is two times average monthly payroll costs plus an additional 25%. The application form says 2.5x.

IS THE LOAN FULLY FORGIVEN?

➢ Yes, as long as

➢ You use it for the previously mentioned

items

➢ Employee and compensation levels are

maintained

➢Payroll costs are capped at $100,000 on

an annualized basis for each employee

LOAN FORGIVENESS EXCEPTIONS

➢ You will owe a balance on your loan if –

➢ Funds are used for anything other than

➢ Payroll costs, including benefits ➢ Interest on any covered mortgage obligation incurred before February

15, 2020

➢ Rent obligations on lease arrangements in force before February 15,

2020

➢ Utility payments for which service began before February 15, 2020

➢ Forgiveness limits

➢ May not exceed the loan amount ➢ Reductions for decreases in full-time employee head count ➢ Reductions for more than 25% reduction of salary or wages of

employees paid less than $100,000 on an annualized basis in 2019

➢ Rehire/Restoration limit

➢ You have until June 30, 2020 to restore your full-time

employment and salary levels for any changes made between February 15, 2020 and April 26, 2020

HOW CAN I REQUEST FORGIVENESS?

➢ You can submit a request to the

lender that is servicing your loan.

➢ You will need to submit documents

to verify

➢ Employees and pay rates ➢ Payments on the eligible

mortgage/lease

➢ Utility obligations

WHEN CAN I APPLY?

➢ April 3, 2020 for small businesses and

sole proprietorships

➢ April 10, 2020 for independent

contractors and self-employed individuals

WHERE CAN I APPLY?

➢ Through any existing SBA lender or

through any federally insured depository institution, federally insured credit union, and Farm Credit System Institution that is participating

➢ A full list is available at www.sba.gov

WHO CAN APPLY?

➢ All businesses, with 500 or fewer

employees, including

➢ Nonprofits ➢ Veterans organizations ➢ Tribal business concerns ➢ Sole proprietorships ➢ Self-employed individuals ➢ Independent contractors

WHAT DO I NEED TO APPLY?

➢ Complete the Paycheck Protection

Program loan application

➢ Submit with required documents to

an approved lender no later than June 30, 2020

➢ All loans are initially 100% approved

by the SBA

HOW LONG WILL THE PROGRAM LAST?

➢ The deadline to submit applications

is June 30, 2020

➢ The funding cap on the program is

$349 billion

WHAT ARE MY TERMS?

➢ Loan terms are the same for everyone

➢ Interest rate – 0.50% fixed rate

➢ Payments are deferred for 6 months, however, interest

will continue to accrue over this period ➢ Loan due date – 2 years from date of inception ➢ Prepayment penalty - $0 ➢ No borrower or lender fees payable to the SBA ➢ No need to prove credit is not available

elsewhere

DO I NEED TO PLEDGE COLLATERAL?

➢ No. Nor do you need to personally

guarantee the loan.

➢ If you do, however, use the funds for

fraudulent purposes, the U.S. government will pursue criminal charges against you

QUESTIONS?