$10,000 EIDL GRANT

PPP coronavirus loans: Forgiveness may not be as simple as business owners think

This article deals with some of the same concerns. To me, some of these financial "experts" are making a mountain out of a mole hill, especially when it comes to the one man dog & pony show, or those with smaller staffs.

What they seem to be concerned about is that due to the unemployment benefit of an extra $600 a week federal kicker, on top of the standard weekly benefit, some employers will have a hard time reaching the staff level they had before this crisis set in for the 8 week period after PPP funding, because some of their employees are already settled in on unemployment for the next several mos.

"One of the first issues is that while loan amounts are based on either 2.5-times average monthly payroll costs for 2019 or the trailing 12 months (up to $10 million), the window to use it is only eight weeks.

“In essence there’s kind of an inherent math problem,” L.J. Suzuki, the founder of CFOShares.org, told FOX Business.

The loan amount is also based on prior staffing levels – before many small businesses laid people off or reduced salaries. Therefore, Spence noted, it may be even more difficult for business owners to use at least 75 percent of their loan on payroll."

"Ultimately your lender is responsible for assessing loan forgiveness. What you will need to show your bank as proof will likely vary, but you will at least need payroll records showing how much was paid in wages on a per-employee basis throughout the 8 week period. You will also need to show what was paid in non-payroll expenses – which will require keeping good documentation. Suzuki noted you may need an invoice from your landlord or a bill from your utility company."

 

Right, it MAY be a problem for those companies with large staffs. Remember, these loans can reach 10 million dollars with up to 500 employees. I hardly doubt that a company with 10 employees or less, is going to have a problem meeting the 75% forgiveness threshold.