Parish 2 nd Webinar on Updates to the Covid-19 PPP Loan, EIDL, SBA - - PDF document

5/7/2020 1

Parish 2nd Webinar on Updates to the Covid-19

PPP Loan, EIDL, SBA Forgiveness, Parish Accounting & FFCRA

Thursday May 7th, 2020 11:00 a.m.

Agenda For Today

Welcome everyone and opening prayer

• 1. PPP Loan
• 2. EIDL
• 3. SBA Forgiveness
• 4. Diocese Expectations Around Administration of these

Programs

• 5. Parish Cluster Accounting
• 6. FFCRA Highlights
• 7. Question & Answer Session

Thank you and closing prayer

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Paycheck Protection Program (PPP)

Paycheck Protection Program Updates:

• The Paycheck Protection Program went live for 2nd time at the end
• f April, accepting applications through SBA lenders.
• $310 billion was appropriated to the PPP –and funds are still available.
• 250% of average monthly payroll from the past year capped at

$100K per employee, up to a maximum of $10M. Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.

• Loan Updates:
• Nearly 476,000 loans totaling approximately $170+ billion have been processed and

approved via nearly 5,200 lenders in the second round. Most of that ($39.6 billion) was through smaller/medium sized community lenders.

• Further, in this second round, the average loan size is currently at $111,000 (as compared

to the first-round average of $206,000) and 85% of the loans have been $150,000 or less.

PPP-Latest Terms and Conditions

• INTEREST RATE –1.0%
• TERM –Two (2) years
• MAXIMUM LOAN AMOUNT -$10,000,000
• PAYMENTS –Deferred for (six) months. (Interest continues to

accrue.)

• COLLATERAL -No collateral or personal guarantees required

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PPP-Reminder of use of funds:

• Must use loan proceeds for the following expenses during the

8-week period commencing on the origination date of the loan:

• Payroll costs
• Rent
• Mortgage interest and
• Utilities
• SBA advising that not more than 25% of the loan proceeds can

be used for non-payroll costs

PPP-Start Date of Funds

The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower. The lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.

5/7/2020 4 Economic Injury Disaster Loan (EIDL)- What did every parish sign up for and why? About the Economic Injury Disaster Loan

• The Economic Injury Disaster Loan is a working capital loan. It

may be used to pay fixed debts, payroll, accounts payable and

• ther bills
• Applicants apply directly to SBA’s Disaster Assistance Program

at www.sba.gov

• There is no cost to apply

Two Parts: A Loan & An Advance

Loan Information

• Up to $2 million
• The interest rates for this disaster are 3.75% for small

businesses and 2.75% for nonprofit organizations with terms up to 30 years determined on a case-by-case basis

• Eligibility is based on the size and type of business and its

financial resources

• 12 month payment deferral on EIDL loan; interest accrues

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Two Parts: A Loan & Advance

• Advance will be for up to $10,000.
• The form to apply is part of the economic injury

disaster loan (EIDL) application.

• If approved, these funds can be used for payroll and
• ther operating expenses and will be forgiven.
• Advance is $1,000 per employee.
• Payment will come in two parts, the advance first

and then the loan. The amount given is to each entity is determined by SBA. You do not have to accept the full amount.

EIDL-How Can it Be Used?

• Fixed debts (rent, etc.)
• Payroll
• Accounts payable
• Some bills that could have been paid had the disaster not
• ccurred.

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EIDL-Ineligible Uses of the Loan

• Dividends and bonuses
• Disbursements to owners, unless for performance of services
• Repayment of stockholder/principal loans (with exceptions)
• Expansion of facilities or acquisition of fixed assets
• Repair or replacement of physical damages
• Refinancing long term debt
• Paying down (including regular installment payments) or paying off loans

provided, or owned by another Federal agency (including SBA) or a Small Business Investment Company

• Payment of any part of a direct Federal debt, (including SBA loans)

except IRS obligations

• Relocation

Who Is Open To Apply?

Notice: As of 11 a.m. Central May 4, the SBA resumed accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on a limited basis, to provide unprecedented relief to U.S. agricultural businesses. At this time, only agricultural business applications will be accepted due to limitations in funding availability and the unprecedented submission of applications already received. In addition, SBA has resumed processing EIDL applications that were submitted before the portal stopped accepting new applications April 15; they will be processed on a first-come, first-served basis.

• Agricultural businesses includes those businesses engaged in the production of

food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).

• SBA is encouraging all eligible agricultural businesses with 500 or fewer

employees wishing to apply to begin preparing their business financial information needed for their application.

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FAQ’s?

• If a client plans to apply for a PPP can they also apply for the emergency

$10K grant?

• Yes, people can apply for both. Guidelines are still being written for how the

two funding opportunities with work in tandem, but for now we know the PPP and the EIDL ADVANCE (up-to-$10,000 emergency grant that is part of the EIDL) cannot be used for the same working capital/monthly expenses.

• Can a business apply for the loan, ask for the $10K grant, and then not

accept the loan?

• Yes, a business can decline the EIDL loan.
• How is the disaster loan amount determined?
• SBA will look at the last three years historical to determine what the business

could have paid if the disaster would not have occurred. The loan funds will not provide for lost sales.

• What if an applicant is approved for the loan but withdraws their
• application. Do they have to re-apply all over again?
• The applicant will have up to 6 months to reactivate their loan that was

approved

SBA Loan Forgiveness-PPP

• Borrower(s) understand that loan forgiveness period is for 8 weeks,

starting from the loan date. Within 10 business days after forgiveness period Borrower(s) will provide documented payroll costs, covered mortgage interest, covered rent/lease payments and covered utilities and that not more than 25% of the loan amount to be forgiven may be for non-payroll costs. Borrower(s) further agree that the following information will be needed at a later date to document loan forgiveness:

• Copies of payroll tax reports filed with the Internal Revenue

Service, including Forms 941 and 940, and Wisconsin income tax withholding and unemployment tax reports for the eight week period following loan origination. Please note: this information is from the Promissory Notes but it is not known yet what the exact documents will be.

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SBA Loan Forgiveness-PPP

• Copies of payroll reports for each pay period for the eight week period

following loan origination. Gross wages, including personal time off (PTO), which includes vacation, sick and other paid time-off, should be reflected.

• Documentation reflecting health insurance premiums paid by the

company under a group health plan, including owners of the company, for the eight week period following loan origination. Copies of monthly invoices will generally suffice.

• Documentation of all retirement plan contributions paid by the employer

for the eight week period following loan origination. Copies of work papers, schedules and remittances to the retirement plan administrator should be made available.

• Copies of lease agreements for real estate along with proof of payment

during the eight week period following loan origination.

• Copies of all statement evidencing mortgage interest paid on debt
• bligations incurred prior to February 15, 2020, including payment

amounts, for the eight week period following loan origination. Please note: this information is from the Promissory Notes but it is not known yet what the exact documents will be.

SBA Loan Forgiveness-EIDL

For the Loan: What kind of record keeping are owner’s going to be required to do for this loan?

• As of April 2, owners will not have to provide documentation of how EIDL funds were

spent (unless audited by IRS), but this could change. For the Advance: Do you have to do any record keeping to prove what it was used for?

• As of April 2, the answer is no, unless a tax audit is performed. This could change.

You cannot use funds from both loans for the same purposes.

• For example, you can’t use both EIDL and PPP towards payroll. As long as you do not

use the EIDL for payroll costs, your PPP eligibility will not be affected. If the EIDL is used for payroll costs, your PPP amount will have to be used to refinance the EIDL. Your EIDL advance grant cannot be combined with the PPP.

• The EIDL can come with an advanced grant of up to $10,000. As a grant, it won’t have to

be paid back. However, it will be subtracted from the PPP loan forgiveness amount and has to be declared when you apply for the PPP.

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Questions

Contact Information: Andy Donahue Nikki Olson adonahue@uwsuper.edu nolson37@uwsuper.edu (715) 394-8352 (715) 394-8147