Most visitors to our site are familiar with the Paycheck Protection Program (PPP).  It has attracted massive interest from business owners and non-profits across the country.  The loan program was established with the passing of the CARES Act on March 27, 2020.  The Program went live April 3rd with a directive to qualified lenders to deliver funding as quickly as possible.  The PPP’s hallmark feature is the eligibility to have the entire loan amount forgiven for meeting certain criteria including restoration of headcount/ salary levels and mandating that for full forgiveness, 75% of proceeds be used for eligible payroll costs, as defined by the Act.

The forgiveness component is the only reason so many businesses, especially the most harshly impacted, were so optimistic and hopeful about this program.  Unfortunately, there are major areas of uncertainty detailing how the calculation works.  We provided a comprehensive list of the major issues country in a prior post.

Final guidance on forgiveness was expected last week after allowing 30 days for public comments (the CAREs Act mandated issuance by April 26, 2020).   While major uncertainty still exists, the FAQ page at the Treasury Cares website offered clarity on a major concern expressed by business owners across the country.

Also passed in the CAREs Act was Pandemic Unemployment Assistance.  The Act allocated funding for an additional $600 to unemployment recipients and expanded eligibility to include gig workers, sole proprietors and other self employed people through the end of July.  This additional benefit, when added to the maximum state benefit, will result in many Americans temporarily earning more on unemployment than they would if they returned to their jobs.  As a result, business owners are concerned that employees will not return.  Borrowers could face major reductions in the amount of eligible forgiveness despite making efforts to compl with the terms outlined in the CARES Act.  The CARES Act indicates that forgiveness will be reduced for any headcount or salary reduction not restored by June 30th.

The salary component of the forgiveness calculation states that each employee be paid at least 75% of their salary over the 8 week covered period following the disbursement of the PPP funds.  This is where many employers would face significant reductions in forgiveness even if they restored their entire headcount and salary levels.

The FAQ today (question #40) makes it clear that forgiveness will not be reduced for employees who decline an offer (with fully restored salary and hours) if the employer takes certain steps to document their efforts.  Per the FAQ released this morning,  the borrower must have made a good faith, written offer of rehire (for the same salary/wages and number of hours), and the employee’s rejection of that offer must be documented by the borrower.

Please join us today for more information on this and the Main Street Lending Program Updates.  Register below.

DETAILS
When: May 4, 2020 12:00 PM Eastern Time (US and Canada)

TOPIC:
COVID19 Lending – Main Street Lending & PPP

AGENDA

• PPP & EIDL Update – Round 2!
• PPP – Overview
• PPP – Funded? Best Practices & Tracking eligible expenses
• PPP – Forgiveness – NEW INFO RELEASED!
• Main Street Lending Program – Overview & Info
• Q&A

Register in advance for this webinar:
https://us02web.zoom.us/webinar/register/WN_sFexuHY0SaeB81SPGvknYg

After registering, you will receive a confirmation email containing information about joining the webinar.

We are happy to discuss any questions or comments you may have.  Our team is working and available to review with you.  Please contact our office at 610-544-5900 or cares@brinkersimpson.com .

We are in this together,

Brinker Simpson & Company, LLC

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).