When will this be over? PPP FAQ
When will this be over? I wish I had an answer, but what I can tell you is that I am hearing more and more from very influential people is that this has to stop. By “this,” they are referring to the economic shutdown. Right, wrong, or indifferent, when I keep hearing the same thing over and over, I know that we are closer to the end of this than not.
Here are some articles that tell me this is the case or at least show a path out.
- “No one wants to talk about this”: CEOs debate the coronavirus shutdown
- A bill that was just introduced by PA lawmakers would seek to secure “waiver[s] to the Governor’s 20200319 TWW COVID 19 Business Closure Order to all public and private construction activities that can adhere to social distancing practices and other mitigation measures defined by the Centers for Disease Control to protect workers and mitigate the spread of the COVID-19 virus.” A link to the bill is here.
- See the linked economic data and market performance from Rob Teeter at Silvercrest Asset Management Group (thanks to Sean O’Dowd for sending to me).
Other than that, I do remain optimistic because private business is helping us to get through this situation and will be the engine which drives the recovery.
Here are some other things that are important:
- PPP FAQ sheet: Rather than reinvent the wheel, I am including the important points which were provided by Chad Bumbaugh at Stambaugh Ness. If you have not applied, please reach out to your bank or anyone on the list.
- Questions 2 & 3 hit on general eligibility.
o Eligible if under 500 employees, or under “small business concerns” standards by NAICS code which we knew
o Added eligibility if meeting “small business concern test” (max net worth not > $15mm, average net income for last two years not more than $5mm)
o Clarified that businesses don’t have to meet all other definitions in Section 3 of SBA.
- Questions 4 – 6 hit on affiliation rules
o Lenders aren’t required to certify, clarified these rules must be applied.
- QUESTION 7 – Clarification of $100k compensation cap
o The $100k Cap applies to only cash compensation – not non-cash benefits like employer contributions to retirement, healthcare, taxes
- QUESTION 14 – Clarification of time periods for calculating payroll costs & number of employees
o Calendar 2019 or preceding 12 months both acceptable
o Average employment or per pay average for determination of number of employees
- Question 15 – Again emphasizes that payments to independent contractors are not in the borrowing base
- QUESTION 16 – Clarification on impact of fed taxes in relation to payroll costs – fed wages withheld do not reduce the wages for purposes of determining the PPP loan amount.
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