HELPFUL INFORMATION FOR YOUR BUSINESS DURING COVID-19

Share on facebook
Facebook
Share on reddit
Reddit
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on digg
Digg
Share on email
Email

This video acknowledges 5 questions that the Numberwise team (mainly Andy) and our clients have been wondering about PPP loan forgiveness. While we don’t have answers yet, Andy shares some thoughts to avoid over-spending for your business.

Highlights from Video

1. Cash vs. accrual method for calculating expenses

Starting at :58 in video

We do not yet know if you are required to use the “cash” (payments made) or “accrual” (costs incurred) for calculating expenses during the 8 week period after you receive your loan funds. While forgiveness is based on “costs incurred and payments made,” what is the limit?

  • For example, if funds are received on a Thursday but payroll is the following day for the prior two week period, would that be forgiven?
  • If you prepay rent for the month after your eligibility period ends, would that be forgiven?

2. Reduction for employee decrease

Starting at 3:32 in video
  • Can you replace two 15 hr/week employees with one FT employee without penalty, as the FTE didn’t change? (Please note: the PPP loan forgiveness application uses a 40 hour week to calculate an FTE.)
  • If an employee doesn’t return, can you replace them with a friend or relative to increase your headcount?

3. Reduction for wage decrease

Starting at 5:30 in video

If an employee doesn’t return, are they included in the calculation?

4. Exemption for re-hires

Starting at 8:03 in video

How long do these “corrections” have to last?

5. Leftover funds after June 30

Starting at 9:17 in video

Funds left over on June 30 – can any money be used after June 30th? Some people want to use the funds as a low-cost loan after the eligibility period ends. We don’t know if you will be required to repay the surplus immediately, but it’s certainly a possibility until we receive more guidance.

For more details on your loan, see our Paycheck Protection Program Loan Guide FAQ blog post or our video on the PPP Loan forgiveness calculation.

Check out our COVID-19 resource page for more blog posts, videos and helpful information for businesses during the Coronavirus pandemic.

About the Author

Andy Smith

Andy Smith

Andy Smith, Founder of Numberwise, has been a CPA since 2004 (pretty impressive, huh?). He leads the strategic vision of the company, signs all those fun tax returns, and tries not to get in the way too much. Learn more about Andy and the rest of the team on the About Us page.
Andy Smith

Andy Smith

Andy Smith, Founder of Numberwise, has been a CPA since 2004 (pretty impressive, huh?). He leads the strategic vision of the company, signs all those fun tax returns, and tries not to get in the way too much. Learn more about Andy and the rest of the team on the About Us page.
SHARE THIS POST
Share on facebook
Facebook
Share on reddit
Reddit
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on digg
Digg
Share on email
Email

More Blogs to Explore...

Stressed Business Owner
Business Management
Steve Turk

Get Out of My Head

Running a business is stressful! You worry about your company, employees, and customers. It can feel like the weight of the world is on your

Read More »

Leave a Reply

Your email address will not be published.

Owl-1-yellow-transparent

Ready to get started?

We would love to help! Send us a message and we will get back you you shortly.

Stay Informed!

Sign up for our newsletter and stay up-to-date on all things Numberwise.

Name(Required)
This field is for validation purposes and should be left unchanged.

This website uses cookies to ensure you get the best experience on our website.