UTSA SBDC COVID Business Recovery Accelerator COVID Business Town Hall Preparing For the Paycheck Protection Program Loan Forgiveness https://txsbdc.org/businessrecovery/ businessrecovery@utsa.edu (210) 458-2272
Disclaimer This training is brought to you by the South-West Texas Border SBDC Network as a public service. It is not designed as a substitute for legal or tax advice, nor is it a comprehensive statement of the law.
Housekeeping • Please mute your computer or phone • Questions will be answered at the end of the presentation • Use the chat box to submit your questions • Please complete the surveys that will be emailed after the presentation • Next COVID Business Town Hall June 9th – registration coming soon!
UTSA SBDC COVID Business Recovery Accelerator Our vision for this program is to help small businesses through Relief, Rebooting, Recovery and Resiliency during and after the COVID-19 pandemic.
Supports a 79-county SBDC Network covering the following areas : • San Antonio • El Paso • Alpine • Laredo • Austin • Rio Grande Valley • Corpus Christi • San Angelo • Eagle Pass • Victoria
Services provided include training and business advising to small businesses on: – Funding • Paycheck Protection Program (PPP) loans • SBA Economic Injury Disaster Loans (EIDL) • SBA and non-SBA loan programs – Employer Resources – Cybersecurity – Workplace Safety
PPP Loan Forgiveness Presented by Rebecca Schultz www.synerlock.com www.synerlock.com
More than 4.3 million small businesses have taken over $500 billion in Paycheck Protection Program (PPP) loans Roughly $100 billion remains available through the PPP loan program Current SBA Loan Forgiveness Application released May 15 th Situation: Millions of small businesses will be filing for relief under the forgiveness process through their PPP lenders Submission of the forgiveness application begins after June 30, 2020 www.synerlock.com
All PPP loans over $2 million in size will be audited SBA will be doing a random audit of loans under $2 million in size Borrowers required to hold onto documentation in connection to SBA loans for 6 years Clear Picture: PPP lenders will be processing massive amounts of documents in a limited amount of time Responsibility and liability connected to improper use of funding carries penalties and falls on business owner(s) www.synerlock.com
Penalties for not adhering to the forgiveness guidelines are stiff Massive amounts of unforgiven debt Importance of can add strain to already weakened businesses Getting this Government guarantees to PPP loans Right: important to banking system Economy is depending on businesses to coming back strong We MUST get this right! www.synerlock.com
11-page forgiveness application provides new terms and timeframes for use in calculations Ability to calculate reduction in forgiveness New Details: Some flexibility on timeframes for use in 8- week (56 days) coverage Clear safe harbor definitions and guidelines www.synerlock.com
Covered Period: Eight weeks (56 days) starting the date borrower receives PPP funding Alternative Covered Period: For bi-weekly (14 days) or more Definitions: frequent payroll periods business owners can opt to co-inside covered 8 weeks (56 days) within payroll cycles starting the next payroll period. Reference Period: January 1, 2020 to March 31, 2020 – Timeframe for pre-disaster wage and FTE consideration and comparison www.synerlock.com
Accrued Expenses: Costs (such as wages) that fall between covered timeframes, that might require additional calculations and/or documentation Average Full-time Equivalency (FTE): Calculation provided for review of full- time employee headcount; number of hours paid per week divided by 40 Definitions: rounded to nearest 10 th max per employee capped at 1.0 Salary/Hourly Wage Reduction: Calculation completed for each employee with salary/hourly wage reduction reduced more than 25% during covered period or alternative covered period compared to reference period. www.synerlock.com
Safe Harbor: FTE safe harbor allows business owners to avoid penalties for non-returning employees if they document and justify unfilled position due to 1) employee refusing to return when written offer provided, 2) fired for just cause, 3) Definitions: employee resignation. Salary Hourly Wage Reduction safe harbor allows for business owners to avoid penalty should annual salary or hourly wages be adjusted within 25% of reference period wages by June 30, 2020. www.synerlock.com
Payroll: Bank statements, payroll processing records, proof of how much you paid each employee (down to detail of number of hours worked each week), payroll tax filings (941), state and local taxes (copy of filings), proof of employer contributions (canceled checks, receipts, statements) Non-payroll: Mortgage interest: Lender amortization Documentation: schedule, receipts, canceled checks, lender statements for 1 month after covered period ends Rent: Copy of lease agreement, receipts, canceled checks, or lessor accounts statements from February 2020 through 1 month following end of covered period Utilities: Invoices/bills starting February 2020, canceled checks, account statements verifying eligible payments PPP Application and all support documents used in connection to the PPP loan www.synerlock.com
Sample Forgiveness Application www.synerlock.com
What you need before you start: Calendar Calculator PPP loan contracts, application & pre-disaster support documents Post PPP funding support documents Patience www.synerlock.com
Reviewing Wages & FTE Totals: www.synerlock.com
Completed Application www.synerlock.com
Schedule A Worksheet FTE www.synerlock.com
Schedule A Worksheet www.synerlock.com
Schedule A www.synerlock.com
Completed Application www.synerlock.com
$12,507.78 unforgiven Review of Loan at 1% over 24 months Future Loan: $530.00 payments starting October 29, 2020 www.synerlock.com
Penalties Things to Safe harbors allow much needed support and flexibility Consider: You MUST be conscious of spending and documentation Anticipate an SBA audit www.synerlock.com
Rebecca Schultz Founder/Executive Loan Consultant Need More? Synerlock Corporation Email: rschultz@synerlock.com www.synerlock.com LinkedIn: Linkedin.com/company/synerlock www.synerlock.com
UTSA SBDC COVID Business Recovery Accelerator COVID Business Town Hall https://txsbdc.org/businessrecovery/ businessrecovery@utsa.edu (210) 458-2272
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