loan options & forgiveness strategies · this slide deck contains information on the covid-19...
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![Page 1: Loan Options & Forgiveness Strategies · This slide deck contains information on the COVID-19 related Loan Options & Forgiveness Strategies and is the most up-to-date as of July 9,](https://reader034.vdocument.in/reader034/viewer/2022050123/5f535e0fdcb5057a824c399b/html5/thumbnails/1.jpg)
Preparing for COVID-19 Recovery
Loan Options &
Forgiveness Strategies
Weekly Update: July 9, 2020
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This slide deck contains information on the COVID-19 related Loan
Options & Forgiveness Strategies and is the most up-to-date as of
July 9, 2020.
Changes are constant and additional guidance is on-going. We will
keep you posted on changes through our weekly webinar updates and
COVID-19 resource center. You can also reach out to your Sax
advisor for the most recent information.
Please visit our Resource Center at www.saxllp.com for on-going
updates, or email [email protected] with questions.
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Powered By
saxllp.com saxwa.com s2solutions.tech
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Our firm provides the information in this webinar presentation for
general guidance only, and does not constitute the provision of legal
advice, tax advice, accounting services, investment advice, or
professional consulting of any kind.
The information provided herein should not be used as a substitute
for consultation with professional tax, accounting, legal, or other
competent advisers.
Before making any decision or taking any action, you should consult
a professional adviser who has been provided with all pertinent facts
relevant to your particular situation.
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Meet Our Recovery Task Force
Todd W. Polyniak, CPA
Partner
Stephen J. Ehrenberg,
CPA, MBT
Partner
Josh Chananie, CPA
Partner
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Today’s Agenda
• Introduction
• Updates
– PPP Loan Application Date Extension
– Release of PPP Loan Data
– Main Street Lending Program
• Economic Injury Disaster Loan Recap
• PPP Loan Forgiveness
– Questions That Keep You Awake at Night
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Updates
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UpdatesPPP Loan Application Date Extension
• Borrowers had until June 30, 2020 to receive funding
• July 4th Presidential signature of bill S. 4116 extended the loan application date to
August 8, 2020
• Over $130B in funding still available
• SBA Lender Match online tool
– www.sba.gov/funding-programs/loans/lender-match
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UpdatesBorrower Information Disclosure
• On July 6, 2020 SBA, Treasury published the following for PPP loans >$150K
– Business name & type, address and zip code;
– NAICS Code;
– Demographic Data;
– Not-For-Profit Information;
– Jobs supported; and
– Loan amount ranges (categories below account for ~75% of loan dollars approved):
• $150K - $350K
• $350K - $1M
• $1M - $2M
• $2M - $5M
• $5M - $10M
• PPP Loans <$150K
– SBA released state or territory totals aggregated by zip code, by industry, by business type and by
various demographic categories
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UpdatesBorrower Information Disclosure – cont’d
• Key Aspects of the PPP Loan Data
– Released to provide transparency to the public
– SBA intent on protecting small businesses• Committed to ensure no harm done to small businesses or their employees
– Delegated loan making process
– List is not indicative of loan forgiveness and/or PPP compliance
– Cancelled loans are not reflected on the list
– Loan demographic data is voluntary
• 75% of all PPP loans did not include demographic information
• SBA is working to collect more demographic information to see which businesses benefitted from
the PPP funding
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UpdatesMain Street Lending Program
• Federal Reserve announced on July 6, 2020 that the Program is fully operational
• Federal Reserve Bank of Boston has a state-by-state list of lenders participating
in the Program– Listing is elective, so other banks may be participating
• Still awaiting confirmation if/how the non-profit programs will operate– Non-Profit Organization New Loan Facility (“NONLF”)
– Non-Profit Organization Expanded Loan Facility (“NOELF”)
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Economic Injury Disaster
Loan Recap
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Economic Injury Disaster Loan ProgramRecap
• Economic Injury Disaster Loan Program
– On June 15, 2020, SBA re-opened the program to all eligible small businesses
• Restrictions for agricultural-only business have been lifted
– $150,000 maximum funding
• Funding process has begun
• Collateral/personal guarantee requirements have changed
– $10K advance limit up to $1k x 10 employees
– Applicants are not required to be approved for an EIDL in order to receive the $10K
advance
– No forgiveness aspect (other than potential $10K advance)
– Detailed application process through SBA
– 30 year amortization, 2.75% - 3.75% interest rate
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Economic Injury Disaster Loan ProgramUse of Proceeds / Interaction w/ PPP
• Loan proceeds may be used to:
– Provide paid sick leave to employees unable to work due directly to COVID-19;
– Maintain payroll to retain employees during business disruptions or substantial slowdowns;
– Meet increased costs to obtain materials unavailable from the applicant’s original source due to
supply chain interruption
– Make rent or mortgage payments; and
– Repay obligations that cannot be met due to revenue losses
• Interaction w/ PPP
– If an EIDL was received from January 31, 2020 – April 3, 2020 and it was not used for payroll
costs, there is no impact on the PPP loan
– If an EIDL was received from January 31, 2020 – April 3, 2020 and it was used for payroll costs,
the PPP loan must have been used to refinance the EIDL
– $10K advance will reduce PPP loan forgiveness amount
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PPP Loan Forgiveness:
Questions That Keep You Awake at Night
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PPP Loan ForgivenessQuestions that Keep You Awake at Night
1) Are my certifications still good? Has my business really been effected by COVID-19?
2) When can I apply for forgiveness?
3) If I am a self-employed individual that is currently claiming unemployment and received the
PPP loan, can I claim unemployment benefits and the PPP?
4) How do I document the rehire exemptions?
5) Will I get audited by the SBA? Will I end up wearing an orange jumpsuit after this is all over?
6) If I go out of business, am I personally on the hook for repayment if forgiveness is not
achieved?
7) If I lay people off right after I spend the money, is the SBA going to look at that negatively and
impact my forgiveness?
8) If I refinance my current debt with a new bank, will I be able to move the PPP loan to the new
bank as well, or am I beholden to the bank I applied to?
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PPP Loan ForgivenessQuestions that Keep You Awake at Night
9) If I shifted employees from one related entity to another in March and each entity has its own
loan, are my FTEs negatively impacted? Why can’t I apply for forgiveness as an affiliated
group?
10) I haven’t transferred my PPP money yet out of the PPP account I have been funding all of the
business expenses. Being that I am part way through my covered period, am I in trouble / have
I not complied with the certification?
11) Can I expend all my funds within the approved thresholds but still not receive 100%
forgiveness?
12) If I am a non-profit who has received the money and I double dip, will I get in trouble with my
government or other funding contracts?
13) If I apply for forgiveness too soon and am one of the lucky ones that is selected for an audit, are
they more severe in their evaluation process than if I applied later?
14) If my PPP fund runs out, what happens if I am still unable to get my business up and running?
15) How do I budget for the upcoming year since there are still so many uncertainties?
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PPP Loan ForgivenessQuestions that Keep You Awake at Night
16) How do I decide whether I should enter into any new contracts since I don't know if I will
have customers that will pay me?
17) What happens if my bank refuses to renew my Line of Credit or extend my debt terms since
my numbers look so bad because of the downturn in the economy?
18) Should I be looking to get out of my leases since I may no longer need the space after the
money runs out?
19) The forgiveness application process is long and confusing. What happens if I make a
mistake that causes me to not get full forgiveness?
20) After all the time spent with the calculations, record keeping and after spending the money,
what if I am told that I did not qualify for the PPP loan from the beginning?
21) What happens if the PPP Loan is not forgiven and I don’t have the money to pay it back?
22) What if my bank wants a lot more information in their version of the PPP forgiveness
application that I will not be able to provide?
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Upcoming Webinar
Thursday, July 16 @ 10 AM
Weekly Recovery Update: COVID-19 Loan Options and Forgiveness Strategies
• For additional questions: Email [email protected]
• Visit Sax’s COVID-19 Resource Center found on Saxllp.com to register for
webinars and for on-going information and resources.
More Resources