Select Page
Senate Passes 5 Week Extension on PPP Applications

Senate Passes 5 Week Extension on PPP Applications

Senate Passes 5 Week Extension on PPP Applications

No rest for weary! Great news for your clients but it could take away what’s left of your summer. Hang in there, it’s almost over!

The U.S. Senate passed a five-week extension of the PPP on Tuesday night.  It was supposed to end on June 30, i.e. June 30 was the last day for small businesses to apply for PPP funds.  But it’s been extended until Aug. 8.  https://www.journalofaccountancy.com/news/2020/jul/senate-approves-5-week-ppp-extension.html

Highlights:

1. There is approximately $129 billion in PPP funding remaining which will allow small business owners more time to apply.
2. The extension move the application deadline from June 30th to August 8th
3. There is talk by members of the senate that the next step should be to pass a second round of PPP loans to aid the smallest businesses with the most need.

Much has been asked of our accounting community in relationship to the government CARES Act program. Many of you are worn out from the effort and the idea of starting a new PPP loan while meeting the 7/15 tax deadline sounds as appealing as getting a root canal without novocaine. That being said, we believe there are a large number of accountants and entrepreneurs that have not taken advantage of this government funded program.

We noticed some discussion about the ethics of accepting this funding if you couldn’t show a direct “hardship”.  Our position is that if you are small business owner or professional service provider supporting your clients through this time, you have very likely experienced hardship. If you are an accountant, and you had to invest in educating yourself, you added additional support and services to your clients, relocated yourself or anything else, you have likely experienced hardship.

It has gotten much easier to apply (see previous blog post that provides a new bank matching tool), and the rules are clearer, so keep in mind that this is as close to obtaining a grant for a for-profit business that we’ll ever see. For so many small businesses, it is worth the extra effort. I encourage you to consider this for yourself and to share this with your clients that did not yet apply

PPP Application Deadline 6/30/20 – Use SBA Lender Matching Tool

PPP Application Deadline 6/30/20 – Use SBA Lender Matching Tool

PPP Application Deadline 6/30/20 – Use SBA Lender Matching Tool

Too Little Too Late? With the Short Deadline, SBA Finally Launches a Lender Matching Tool to Make it Easier for Small Businesses to Access Funding. 

The SBA’s Lender Match resource is meant for pandemic-affected small businesses who haven’t applied for or received an approved PPP loan. It connects small businesses trying to access PPP funds with lenders before the loan application deadline of June 30, 2020.

How it Works:

“Within two business days after entering their information into the Lender Match platform, a borrower receives an email from lenders who have been matched with them. The borrower can see lenders’ requests for them to begin an application.  Borrowers are then able to begin the application process directly from the email they receive.”

“Lender Match was on pause due to CARES Act implementation priorities and loan volume. It is now being reinstated for CDFIs and other Small Asset Lenders.  Leads will only be forwarded to CDFIs and Lenders with < $10b in assets until the PPP program ends on June 30, 2020, at which time Lender Match will be open to all participating SBA Lenders.  Lender Match not only connects borrowers with accessing PPP loans, but also other SBA lending products, such as 7(a), 504, Microloans, and Community Advantage loans which are currently offering debt relief.”

 

“SBA Rolls Out Dedicated Tool for Small Businesses to Connect with CDFIs, Small Asset Lenders Participating in PPP: The U.S. Small Business Administration.” Small Business Administration, 19 June 2020, www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-rolls-out-dedicated-tool-small-businesses-connect-cdfis-small-asset-lenders-participating-ppp?utm_medium=email&utm_source=govdelivery.

NEW PPP Guidance for the Self-Employed!

NEW PPP Guidance for the Self-Employed!

NEW PPP Guidance for the Self-Employed!

SBA Announces Full Forgiveness for Self-Employed Borrowers

As always, PPP stuff is ever-changing.

The SBA announces full forgiveness for SELF-EMPLOYED borrowers and releases the new PPP Loan Forgiveness application as well as the EZ Loan Forgiveness application. What do these new applications include that make life easier for borrowers? Let’s take a look…

Here’s a Forbes article explaining the forgiveness rules for the SELF-EMPLOYED:  https://www.forbes.com/sites/brianthompson1/2020/06/17/sba-finally-clarifies-ppp-loan-forgiveness-rules-full-forgiveness-for-self-employed-borrowers/#3f617b186741

That’s key for the SELF-EMPLOYED, who previously with the 8-week time period were limited to 8/52 of their 2019 Schedule C Net Income; now with the new 24 week time period, they can use the original amount from their loan application of 2019 Schedule C Net Income / 12 x 2.5.  That’s lovely for the self-employed.

Now what we’d really like is future guidance on owner compensation for owner-employees (i.e. S-Corp owners), who are still officially limited to the 8/52, although this article makes the assumption that the 2.5 calculation should apply to S-corp owners, we’d really like it to be spelled out instead of an assumption.

New applications, Fewer Calculations, and Less Documentation Bring New Questions

The revised PPP Loan Forgiveness Application is out and is down to 5 pages from 11 pages. In the revised version, Page 1 with the Loan Forgiveness Calc is the same as before, but the Certification includes language about the 24-week Covered Period being used and that the 2.5 calc ($100,000 of 2019 compensation / 12 x 2.5) = $20,833 cap per individual and that if the 8-week Covered Period is used, then the 8/52 calculation cap applies.

Once again, this is where they specifically mention employee or SELF-EMPLOYED individual/general partner but NOT an S-corp shareholder.

The Newly released applications consisted of a revised full loan application and the EZ loan application. The new EZ loan application applied to:

  • SELF-EMPLOYED borrowers with no employees; OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number of hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.

Here is a link to the SBA summary of the Loan Forgiveness Application revisions as well as a link to download the instructions and applications themselves:  https://content.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20%28Revised%206.16.2020%29.pdf

Here’s one final link to a new summary from the Journal of Accountancy, which includes 2 additional links to both the revised Loan Forgiveness Application and the EZ Loan Forgiveness Application for SELF-EMPLOYED with no employees: https://www.journalofaccountancy.com/news/2020/jun/ppp-loan-forgiveness-applications.html

We will release all the updated information this week as it becomes public, so make sure you check back for updates!

PPP Loan Forgiveness NEW Extended Rehire Guidelines Signed Into Law – What Does This Mean?

PPP Loan Forgiveness NEW Extended Rehire Guidelines Signed Into Law – What Does This Mean?

PPP Loan Forgiveness NEW Extended Rehire Guidelines Signed Into Law – What Does This Mean?

PPP Loan Forgiveness Has Been Given! 

Small businesses can officially take a sigh of relief as the Paycheck Protection Flexibility Act was unanimously approved by the Senate and officially signed by President Trump. 

While the new forgiveness guidelines have not yet been released, businesses can finally start to take a second look at how they will allocate their funds. Although the new law eases a lot of the pain around getting up and running, there are still major unanswered questions as new issues arise with hiring back employees. 

Employers are complaining that the federal $600 unemployment benefit was in direct conflict with the purpose of PPP. The new law now makes it so the employer is not penalized if the employee doesn’t return to work. The new changes helping with this concern are:

  1. The rehire date is extended to December 31, 2020 
  2. Can show an inability to rehire individuals who were employees of the eligible recipient on February 15, 2020
  3. Can show an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020
  4. Is able to document an inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements related to COVID-19.

It’s still unclear as to what qualifies as the “documentation to show the inability to return to the same business activity” or standard of “inability to rehire individuals” but as the new guidelines are released we hope it will break down what those standards are. 

 

We will release all the updated information this week as it becomes public, so make sure you check back for updates!

What is a Tech-Enabled Franchise Model and Why Should You Care?

What is a Tech-Enabled Franchise Model and Why Should You Care?

What is a Tech-Enabled Franchise Model and Why Should You Care?

CPA MOMS® is a Technology-Enabled Franchise Model

This week CPA MOMS® Founder and CEO, Mayumi Young, CPA was the featured guest on the Franchise Bible Coach Radio Show. The subject was the Power of Technology-Enabled Franchise Models.

Tech-Enabled (for short) means that technology is at the center of the business model to make the franchise owners more profitable and to increase the overall efficiencies of the business model. CPA MOMS® enduring commitment to building the absolute best and most robust tech tools for it’s CPA “mompreneurs” has resulted in an extremely streamlined business model that allows our franchise owners to hit the ground running and focus on giving its valuable customers the best service available in the marketplace today. In fact, the podcast host and 30 year franchise expert, Rick Grossmann noted that “CPA MOMS® is the most technology-enabled company that he has seen in the franchise industry.”

You can watch the video podcast by clicking on the video on this page. To learn more about the many benefits of joining the CPA MOMS® family as a franchisee, visit our franchise information page at https://cpa-moms.com/find-a-client

Covid Relief Case Studies: Businesses who went from Uncertainty to Survival

Covid Relief Case Studies: Businesses who went from Uncertainty to Survival

Covid Relief Case Studies: Businesses who went from Uncertainty to Survival

Received funding? Still waiting for approved funds? We get it, there is no same situation for anyone.

We are all struggling with the uncertainty of how or when we will receive funding to keep our businesses afloat. After reading comments from our community asking the what, when, and where’s of how individuals got approved for funding. We decided to create case studies from different types of businesses to shed some light on their Covid lending experiences.

*NOTE: All information provided by the businesses are kept completely confidential*

Here are two case studies from businesses in the CPA MOMS community who graciously shared their experiences.

Case Study #1:
An accounting firm organized as an S Corp has an annual revenue of $600,000 per year and an annual income/net profit of $300,000 per year. The company has 3 employees. They applied for the PPP (Paycheck Protection Program) with Carter Credit Union, as a new relationship. This new bank relationship was actually introduced through CPA MOMS. They applied on Saturday, April 25, 2020, for the amount of $56,000. They were approved within 5 days and received funding for the full amount. 

Case Study #2:
A business organized as a General Partnership (Form 1065) has an annual revenue of $7,600,000 per year and an annual income/net profit of $1,300,000 per year. The company has 18 employees. The company applied for the PPP (Paycheck Protection Program) with Synovus Commerical Bank, in which they had a good existing relationship. They applied on Saturday, April 4, 2020, for the amount of $225,060. The funds were received on April 11, 2020, for the full amount.

Do you have a unique or successful experience with applying for funding? Let us know! Comment below or join one of our Facebook communities below to share it with others.

 

CPA MOMS Entrepreneur Facebook Group: https://www.facebook.com/groups/cpamoms.entrepreneur/

CPA MOMS Accounting/Tax Facebook Group: https://www.facebook.com/groups/cpamoms/

For more Covid resources or support for small businesses, please visit: https://cpa-moms.com/covid