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Coronavirus Stimulus Small Business Loans: Your Next Steps

Posted by Concannon Miller on Wed, Apr 1, 2020

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Coronavirus Stimulus Small Business Loans: Your Next StepsLate yesterday, the Department of Treasury released the first information on the SBA loan program related to the CARES Act.

We have promised to keep you updated as things take place. We understand from SBA lenders that there is still a lot of work to do and guidance needed from the Dept of Treasury.

On our end, we are actively monitoring, meeting and reviewing all of this information and commit to being ready to advise and guide you through this process.

What is PPP?

One of the provisions of the 2020 CARES Act is the Paycheck Protection Program (PPP) where businesses will receive loans meant to help support payroll during the period February 15, 2020 through June 30, 2020 through 100 percent federally guaranteed loans if they maintain their payroll during this emergency.

If the employer maintains its payroll, then the portion of the loan used during the covered period for eligible payroll costs, interest on mortgage obligations, rent, and utilities would be potentially forgiven on a tax-free basis.

Get more details in our recent article: Stimulus Bill Gives Small Businesses $377B in Loans to Retain Employees

Who is eligible? 

You should be if you are an employer with fewer than 500 employees.

What do we know now?

  1. Department of Treasury is working on regulations and just yesterday released the application and some supplemental information – It can be found here.  While this is the application provided by the SBA, keep in mind that some of the lenders may use/require a different format (e-forms, etc).
  2. Additional regulations and guidance are expected later this week.
  3. Treasury released the application this afternoon - you can access it here. Applications cannot be submitted prior to Friday.
  4. Lenders are working vigorously with the SBA to be ready to administer these loans for you, but they do not have all the guidance just yet.


What can you be doing right now to prepare?

  1. Contact your lender to let them know that you will be applying for this loan and find out what they recommend as current next steps.
  2. Open a bank account into which you will deposit these loan proceeds once the loan is funded; this will keep the funds segregated from general operating funds, and from this account you will pay only eligible costs.
  3. Begin gathering the following information in preparation for the application process – please note that the list of necessary documents is NOT yet known, and as such, this list is subject to change.

  2019 Forms 940 and 941 (all quarters) from your payroll company
  2019 Form W-3 from your payroll company
  2019 Payroll summary and listing of employees who earned more than $100,000
  2019 State unemployment tax return (all quarters) from your payroll company
  Cost of health insurance premiums for 2019 – fill in the highlighted rows and return to your CMCo team (click here for spreadsheet)
  Cost of employer contributions to retirement plans in 2019 – fill in the highlighted rows and return to your CMCo team (click here for spreadsheet)
  Articles of organization/incorporation for all business entities
  You may also want to have a current personal financial statement and your last three years business tax returns ready


Stay tuned. 
 
More to come on forgiveness.

Until more clarity is provided, we recommend that you take these steps to be in the best position once applications are being accepted. We are here to help – please let us know what we can do for you. Contact us here for personalized assistance.

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Topics: Business consulting, 2020 Coronavirus

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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