I promise that one day I’ll write to you and my Houston Metro area readers about matters other than government aid, the CARES Act, PPP/EIDL, and whatnot.
But as we all keep saying: these are extraordinary times. Pick your cliche — it all fits right now.
But here is a piece of semi-urgent news:
It looks like there is a deal that should be passed by the House on Wednesday that will add about $310B in funding for PPP loans right away.
So, take heart if you applied, and heard no word: there should be more help coming for you.
And if you have not applied, begin that process ASAP.
A few things worth noting for my Houston Metro SMB clients about the PPP, that we’ve learned from the SBA:
Yes, there were headlines about some larger companies that somehow got funding, but here’s the actual breakdown per the SBA (link goes to Marco Rubio’s Twitter account, which is a great place to track the ongoing negotiation, if you’re so inclined).
— As of a few days ago, almost 3/4 of ALL PPP loans were for less than $150K.
— The SBA processed 1.6M loans total in 12 days — which is the equivalent of what they had processed in total over the past 14 YEARS.
So you know, there are currently 800K unprocessed applications still in the queue with the SBA.
Which means that the next round of funding for the PPP will go similarly fast — but it also means that if you did NOT receive funding, and already submitted an application — you should be fine.
So, like I always say: don’t panic.
Small banks, credit unions, Paypal, Lendio, Kabbage, et al are the best places through which to apply. So get on your horse and get some funding.
And we are here to help.
I will also say this — there are OTHER alternatives for Houston Metro business owners to getting even more help (aside from the PPP) that we’ve been unearthing that might even be better (in certain cases), more controllable, and perhaps even more lucrative.
I will cover those next week, after we see how this next cycle plays out. They include payroll tax credits, EIDL payments covered for you by the SBA, and more.
If you, my Houston Metro business owner friend, have already received funding, read this:
Disbursement compliance is essential. Don’t go crazy spending this money. Do it right.
The wolves will be howling to ensure that there isn’t any fraud within this slapped-together program. Which means that you need to have your ducks in a row about HOW you spend this money.
Here are a few things you need to know ASAP for these funds to be forgivable:
1) The funds MUST be spent in the 8 weeks following the disbursement date.
2) They cannot be spent on anything BESIDES:
- Payroll (capped at $100,000 on an annualized basis for each employee)
- Group healthcare premiums (employer portion only)
- Rent/Mortgage (for the business only)
3) You cannot juice these numbers by giving yourself or your employees a “bonus”. YES, you can bonus your people, but the numbers that COUNT for PPP forgiveness are the annualized figures, not *just* what is spent within these next 8 weeks.
4) You must keep 75%+ of your payroll figure intact (remember, this is called the “Payroll Protection Plan” for a reason).
By the way, on rehiring: 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.
Excellent bookkeeping is obviously important here. This is NOT the time to cut corners on that front.
The very good news for YOU is: we’re here to help. You actually DON’T have to do this all alone.
If you want help from experts who get it, and who have YOUR best interests in mind…
…you know where to find us.
TST Accounting, LLC
I’m grateful for our chance to serve you and your business — and we are dedicated to its success, in every season.
Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.