Payroll Protection Program

Additional information came out overnight about the Payroll Protection Program.
A fact sheet was posted on The Department of the Treasury website. I have included some of the highlights.
What will you need to apply?
Yesterday’s communication included a full list of what one of the lenders is requiring. You will most certainly need
– 2 or 3 years of business and personal income tax returns
– Current Financial Statements
– Payroll Information
Your books and records have never been so important as they are now. If you are not up to date, please get your work into us as soon as possible.
Will you need to first look for other funding before applying for this loan?
No. The SBA is waiving that requirement for this loan program.
How long will the program last?
Until June 30, 2020, but you should apply as soon as possible.
How many loans can you take out under this program?
What counts as payroll under this program?
– Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee)
– Employee benefits including costs for vacation, parental, family, medical, or sick leave
– Payments for group health care benefits
– State and Local payroll taxes on compensation
– For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self employment also capped at $100,000 on an annualized basis
I have received several questions about whether or not you can include payments to your independent contractors in this scenario. My understanding is that technically they work for themselves. As such, they would need to file for this under their own companies.
How large can the loan be?
The loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. This is subject to a $10 Million Cap.
How much of the loan can be forgiven?
– You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent and utility payment over the 8 weeks after getting the loan.
– Not more than 25% of the forgiven amount can be for non-payroll costs
– You will also owe money if you do not maintain your staff
– Your loan forgiveness will be reduced if you decrease your full-time employee head count
– Your loan forgiveness will be reduced if you decrease your salaries or wages by more than 25%
– You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
How can you request loan forgiveness?
You will submit a request to the lender that is servicing the loan.
What is the interest rate of the loan?
0.50% at a fixed rate.
When are payments due?
All payments are deferred for 6 months.
When is the loan due?
In 2 years.
Is there a prepayment penalty?
Will you need to pledge collateral?
No. There is no collateral requirement on this program.
Will you need to personally guarantee this loan?
No. There is no personal guarantee. However, if the proceeds are used for fraudulent purposes, the US Government will pursue criminal charges against you.
When does the application process begin?
– Small businesses and Sole Proprietors may apply beginning April 3, 2020
– Independent Contractors and Self-Employed Individuals may apply beginning April 10, 2020
Where can you apply?
As stated previously, this loan must go through a Lender participating in the SBA 7(a) program. Please go to the SBA Website for an approved list of their lenders.
The Loan Application
The actual loan application was published on the SBA Website as well. It can be found at
One final thought
Getting a loan approved isn’t primarily about getting a lender to say yes. It is more about not giving them a reason to say no.
By definition, you are working a double negative.
This process isn’t going to be easy. They are going to ask you for a laundry list of items that will be enough to make any billy goat puke. If you are in any way difficult with your lender about what they want, you will risk rejection. There will be hundreds of thousands of entrepreneurs in line across the country for this free money. Don’t be foolish enough to give them a reason to say no.
It will just be too easy for them to go to the next person in line.
Also, you will need to be positive.
You will need to be a person that they actually want to talk to. If you go into your lender and start whining and moaning about how terrible your business or your life happens to be, then why are they ever going to want to talk to you in the future? Why would they ever return one of your calls? Why wouldn’t they just lose your application?
Please realize that they are not there to help you. It’s the other way around. You are there to help them.
You are there to help them not say no.
Also please realize that you are not alone in this. We are there, standing right beside you.
Keep your head up. Keep moving forward. Stay positive my Brothers and Sisters, and we will all get through this together.
As always, Accounting Solutions Ltd. stands ready to fulfill its mission and purpose to protect you, your family, and your business. If there is anything that you need, or even if you just need to talk, we are here. I remain,
Sincerely yours,
Chris Amundson
Accounting Solutions Ltd.
CONFIDENTIALITY NOTICE AND LEGAL DISCLAIMER. The information contained in this email message, including any attachments, is legally privileged and confidential and intended only for the addressee(s). If you are not the intended recipient, you are hereby notified that any reading, use, or dissemination of this message is strictly prohibited. If you have received this message in error, please notify us immediately and delete this message from your system.
Although this email and any attachments are believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure it is virus free. Accounting Solutions Ltd. accepts no responsibility for any loss or damage arising from receipt and use of this email.
Note that the only professional services provide by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.