PPP2 Loan Differences

There isn’t a lot of information coming out about the new bill that was signed into law. One would think that this is the only thing people can talk about, given the fact that there’s something in it for everyone. The problem is that the actual enactment of this 5,593 page behemoth is January 6, 2021 and the SBA has ten working days after its enactment to make whatever changes they want..

No one is talking about this one because no one actually knows what they are talking about yet. Nothing is carved in stone or, as my mafia brethren would say, signed in spaghetti sauce.

Given the fact that anything I now write about can change at a moments notice, there are a few things in this bill that stand out.

EIDL Grants No Longer Reduce PPP Loan Forgiveness

As discussed in prior columns, if you received an EIDL Grant prior to this, it reduced the amount of forgiveness on your PPP Loan. Under PPP2, as the new package is being called, this is no longer true. If you received a grant, it will no longer reduce your forgiveness.

That begs a question. Given the forty of these that we’ve already submitted, what do we do about the ones that had a set aside for the grant? Do we need to resubmit another package? No idea. Stay tuned.

Additional $20B in EIDL Grants To Become Available

That’s right, my brothers and sisters. More free money. The bill only says that it will be available, it doesn’t tell you how to get it. That, I would presume, will be forthcoming.

PPP2 Loan Qualification

There’s an enormous amount of conflicting information on this one. The bill says that to qualify, an entity must be able to prove that their receipts were down 25% from a quarter in 2020 to the corresponding quarter in 2019.

Isn’t that interesting?

It doesn’t specify the quarter. It could be the second quarter, where most people were down. What if you were a retailer and your fourth quarter was down because no one was walking into stores? We’ll see what happens. I’m finding it hard to believe that they would again make it this easy to qualify.

That also begs the question of how do you prove it.

The loan deadline has been set at March 31, 2021, but the incoming administration will probably extend that deadline.

Simplified Forgiveness for Loans Under $150K

It basically simplifies the forgiveness form to be similar to the Form 3508S which we are already using on loans below $50K. We’ll be able to discuss this more when they actually publish the new form.

Tax Deductibility of PPP Loan Expenses

According to the bill, for the first time in American Tax Law History, forgiveness of debt will not cause an income taxable situation.

Again, please be patient on all of this. It will certainly change.

Let me leave you with this.

I gave up doing New Years Resolutions one year when I resolved to not do them anymore. As I sat this New Years, being ridiculously overcharged for a mediocre meal and lousy service, I began wondering what this new year would actually be like.

I have to tell you that I don’t think it’s going to be much easier than last year.

Maybe I’m just playing Johnny Raincloud, being the pessimistic accountant that people pay me to be, but I don’t think that everything is going to rebound half as quickly as many think.

Yes we have vaccines, and I thank God for them daily, but how quickly can we get them manufactured and administered? There are already ridiculous logistical problems being uncovered in most states of our union. Hopefully, they’ll be able to learn from these mistakes and not make them in the future.

Then you ask questions about the percentage of the population that don’t want to get vaccinated. I’ve heard predictions as high as 40% of our population who would refuse a vaccination. This will certainly prolong the problem.

Then there’s the portion of our population who, no matter what happens, will still be too afraid to leave their homes. Some people just enjoy hunkering in bunkers, but I’m not like most people.

When I see difficulties, I also see opportunities.

This is going to another year where innovation, improvisation, and frankly guts will make all the difference. As your competitors go out of business, what can you do to get their customers? What new products or services can you offer? What new ways can you deliver those products and services? If you’re not asking these questions, you could be left behind.

In other words, it’s still time to lead.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you’re a current client or not, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.