Paycheck Protection Program Loan Forgiveness Best Practices

Paycheck Protection Program Loan Forgiveness Best Practices

Whether the impact is on a global, national, or individual industry level, this pandemic is already changing the way businesses are operating on a day-to-day basis. As we venture past the peak of the pandemic, businesses are going to have to adapt to the new world in which they reside in order to survive. The Paycheck Protection Program loan has become a lifeline for small businesses. Some of these loans may even be forgiven if businesses meet certain criteria. These criteria include: making sure your business truly qualifies for the PPP funding, at least 75% of the funds must be used for payroll expenses, and use the rest for eligible expenses. This article discusses some best practices for qualifying for loan forgiveness.

To view this article, click HERE to access the original content.

New SBA Guidance Regarding Paycheck Protection Program – Q&A #46

On May 13, the Small Business Administration (SBA) issued additional guidance regarding the Paycheck Protection Program (PPP). They added a highly anticipated new question and answer to their lengthy FAQ: “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?”

One of the requirements when submitting a PPP loan application is a self-certification by the applicant that the loan is necessary to support their ongoing operations in light of the current economic circumstances. Many borrowers called for further clarification on this point out of fear that they would later be judged as having made a false self-certification and face potentially severe civil or criminal penalties.

The clarification on May 13 describes a safe harbor for borrowers who, when combined with their affiliates, receive PPP loans of $2 million or less. Those who receive PPP loans of $2 million and less will be deemed to meet the required certification concerning the necessity of the loan request in good faith. The SBA clarifies the thinking behind the creation of this safe harbor, explaining that:

  1. Borrowers with loans of this size are unlikely to have access to other sources of liquidity during this difficult economic time.
  2. The creation of the safe harbor will dispel a lot of uncertainty that these smaller businesses had about accepting PPP loans, thereby helping the program to operate more smoothly.
  3. Discounting this set of loans from the review process will allow the SBA to better handle the large workload they have before them and focus their efforts on the subsection of borrowers whose self-certifications may not be genuine.

The SBA clarification also addressed what will happen, if in the course of a review, a borrower who receives more than $2 million lacked an adequate basis for their good-faith certification as required to obtain their PPP loan. If this is the case, the borrower will need to return the full amount of the loan. If they do so, the SBA will not “pursue administrative enforcement or referrals to other agencies.”

It is important to note that this is only a safe harbor for meeting the economic uncertainty certification. Borrowers still must track expenses during the covered period and apply for loan forgiveness with their lender.

Playbook for Re-Opening Your Business

Playbook for Re-Opening Your Business

As the country and even the world shift their attention to the seeming long-lasting impact of the Coronavirus, updates appear to be coming out each day. Whether the impact is on a global, national, or individual industry level, this pandemic is already changing the way businesses are operating on a day-to-day basis. As we venture past the peak of the pandemic, businesses are going to have to adapt to the new world in which they reside in order to survive. Specifically, within the small business industry, changes such as new regulations and employee health monitoring are occurring. 

To view this article, click HERE to access the original content.

Networking Tips for Accountants

Networking Tips for Accountants

For many professionals in the accounting field, networking is a scary word. Oftentimes, accountants go into the field because they prefer numbers over people. If this sounds like you, don’t worry. Today we want to offer some tips for making networking easier for you. 

1. Generate great conversations.

One key to good networking is creating interesting and memorable conversations. In order to do this, when you find yourself in a networking situation, remember to bring your OARS:

  • Observe ‚Äì Pay attention to what is going on around you.
  • Ask ‚Äì Asking questions is a great way to keep conversations moving.
  • Relate and/or Reveal ‚Äì Empathize with the people around you. Be willing to share how you have encountered the same issues or situations as them.
  • Sustain with Stories ‚Äì Have one or two good stories in the back of your mind to bring up if the conversation dries up.

2. Stand out from the crowd.

The best networkers know how to shine. Try these tips:

  • Focus on the people around you, rather than getting distracted by what is happening outside of your conversation. Others will appreciate it when you stop doing other things, make eye contact, and listen attentively.
  • Pay attention to names‚Äîit helps everyone feel comfortable and appreciated. Introduce yourself and others with enthusiasm and, as often as possible, use people‚Äôs names. If you have trouble remembering names and other information given during introductions, develop some association tricks to help you pick up names, roles, affiliations, etc. more easily.
  • Have a ‚Äúbag of tricks‚Äù‚Äîthree to five planned topics or pieces of conversation‚Äîthat you can pull out in the event of an awkward silence. The best way to develop these is to read often, share knowledge freely, and be aware of your world.¬†

3. Prepare your entrance and exit lines in advance.

Smoothly entering and exiting conversations is something of an art form. Luckily, it is a skill that anybody can develop. All it takes is a bit of planning and practice. Try these tips:

  • When you see a crowd of three or more people, try walking up and asking, ‚ÄúMay I join you?‚Äù It is a simple and effective way of entering a conversation.
  • When you are ready to disembark, try one of the following moves:
    • Wait for a lull in conversation then excuse yourself
    • Wish the party well and depart
    • Invite the group to join you in another location or activity
    • Offer a next meeting time

4. Keep an ample supply of business cards on hand.

Many people struggle to remember names, faces, and conversations, especially during networking events where they meet a lot of new people. Sharing your business card with people you meet is a great way to help them remember who you are and what you do. It can even be a helpful touchpoint when you reach out to them in the future. For example, in a follow-up email you can remind them, “My name is John Doe, we met at such-and-such event—I gave you my business card.”

5. Practice your handshake.

Nobody likes a limp handshake. Luckily, if you struggle in this regard, it is an easy skill to master. Consider asking a friend, a colleague, or your spouse to practice with you. Have them evaluate your handshake and general demeanor as you pretend to meet for the first time. As you work to develop a firm, confident handshake, be sure that is accompanied with eye contact and a smile. 

6. Keep your volume in mind—speak loudly enough to be heard, but do not yell.

Remember the last time you were in a conversation with somebody who spoke so quietly that you constantly had to ask them to repeat themselves? Nobody likes to be in that situation. Make a better impression while networking by speaking at a volume that is easy for others to hear and understand. That said, don’t take it too far—you don’t need to yell. Pay attention to indicators that your speaking volume is not at a good level and adjust accordingly. 

Networking can be an intimidating task. The best way to get more comfortable is to practice—put yourself out there and give it a try. Make sure to review these tips prior to attending your next networking event, and pay attention to how they help!

How The Office of the Future Will Look After Coronavirus

How The Office of the Future Will Look After Coronavirus

As the country and even the world shift their attention to the seeming long-lasting impact of the Coronavirus, updates appear to be coming out each day. Whether the impact is on a global, national, or individual industry level, this pandemic is already changing the way businesses are operating on a day-to-day basis. Specifically, changes to the workplace such as wider corridors and better air filtration are occurring. 

To view this article, click HERE to access the original content.

PPP Loan Updates – Good Faith Certifications and SBA Review Process

Updates continue to be issued by the SBA regarding the Paycheck Protection Program (PPP) loan provisions through the issuance of new Frequently Asked Questions (FAQs). Recent focus has been placed on FAQ 31 in reference to the statement “Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”

Below are certain updates regarding good faith certifications and the SBA review process through May 3, 2020:

  • While FAQ 31 initially focused on ‚Äúlarge companies‚Äù, FAQ 37 expanded that focus to include all businesses, both public and private.
  • For those entities that have access to ‚Äúother sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business‚Äù, they do not qualify for a PPP loan. The SBA uses an example that ‚Äúit is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such company should be prepared to demonstrate to the SBA, upon request, the basis for its certification.‚Äù
  • With this newly issued guidance, the SBA established a safe harbor: ‚ÄúAny borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by the SBA to have made¬† the required certification in good faith.‚Äù
  • Under FAQ 39, ‚ÄúTo further ensure that PPP loans are limited to eligible borrowers in need, the SBA has decided, in consultation with the Department of Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender‚Äôs submission of the borrower‚Äôs loan forgiveness.‚Äù
  • Through the Freedom of Information Act, certain information will be made public, as already evidenced by the publicity received by certain high-profile loan recipients. We anticipate this scrutiny to increase over the life of this program.
  • We recommend you consult your attorney if you have concerns regarding these updates. ¬†

To review the FAQs issued through May 3, 2020, please visit https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2003%2020.pdf.

We're Here to Help

If you have any questions regarding the latest updates, or simply want to chat about your current situation, please do not hesitate to contact our office. For more specific information on the COVID-19 relief efforts, visit our COVID-19 blog.

Sincerely,

Reynolds Bone & Griesbeck PLC

IRS Releases Notice Regarding Tax Deductions and PPP Loan Funds

On Thursday, April 30, the IRS released Notice 2020-32. The announcement effectively disallows a tax deduction for any expenses that are paid with forgiven Paycheck Protection Program (PPP) loan proceeds.

The PPP was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a historic $2.2 trillion stimulus package. The loan program allows small businesses to borrow funds equal to 2.5 months of specified payroll from the Small Business Association (SBA). If their loan expenditures meet certain criteria—in brief, spending the money within eight weeks on payroll and other specific expenses—then the loan may be forgiven.

Generally, when a taxpayer receives loan forgiveness, they are required to report the forgiven amount as income. However, section 1106(i) of the CARES Act explicitly states that income associated with forgiven PPP loans should be excluded from gross income.

The Notice appears to be counter to Congressional intent. Senator Chuck Grassley (R-IA), the chairman of the Finance Committee, voiced his disappointment with the Notice upon its release. The IRS contends that Congress will need to act if a different result is intended.
For further details, click here to read the IRS announcement in full

We're Here to Help

If you have any questions regarding the latest updates, or simply want to chat about your current situation, please do not hesitate to contact our office. For more specific information on the COVID-19 relief efforts, visit our COVID-19 blog.

Sincerely,

Reynolds Bone & Griesbeck PLC