UTSA SBDC COVID Business Recovery Accelerator COVID Business Town - - PowerPoint PPT Presentation

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
• Alpine
• Austin
• Corpus Christi
• Eagle Pass
• El Paso
• Laredo
• Rio Grande Valley
• San Angelo
• 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

www.synerlock.com

Current Situation:

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 SBA Loan Forgiveness Application released May 15th 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

Clear Picture:

 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

 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

Importance of Getting this Right:

 Penalties for not adhering to the

forgiveness guidelines are stiff

 Massive amounts of unforgiven debt

can add strain to already weakened businesses

 Government guarantees to PPP loans

important to banking system

 Economy is depending on businesses to

coming back strong

 We MUST get this right!

www.synerlock.com

New Details:

11-page forgiveness application provides new terms and timeframes for use in calculations Ability to calculate reduction in forgiveness Some flexibility on timeframes for use in 8- week (56 days) coverage Clear safe harbor definitions and guidelines

www.synerlock.com

Definitions:

 Covered Period:

 Eight weeks (56 days) starting the date

borrower receives PPP funding

 Alternative Covered Period:

 For bi-weekly (14 days) or more

frequent payroll periods business

• wners 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

Definitions:

 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 rounded to nearest 10th 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

Definitions:

 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) 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

Documentation:



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

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

Review of Future Loan:

$12,507.78 unforgiven Loan at 1% over 24 months $530.00 payments starting October 29, 2020

www.synerlock.com

Things to Consider:

 Penalties  Safe harbors allow much needed

support and flexibility

 You MUST be conscious of spending and

documentation

 Anticipate an SBA audit

www.synerlock.com

Need More?

Rebecca Schultz Founder/Executive Loan Consultant Synerlock Corporation Email: rschultz@synerlock.com www.synerlock.com LinkedIn: Linkedin.com/company/synerlock

UTSA SBDC COVID Business Recovery Accelerator

COVID Business Town Hall https://txsbdc.org/businessrecovery/ businessrecovery@utsa.edu (210) 458-2272