Stimulus Package FAQ

Most frequent questions and answers from our "Building Trust in Trying Times" Webinar Series

Disclaimer

The questions, answers and information provided by the BBB Trust in Trying Times Webinars are from third-party experts and participants. Given the changing nature of the current economic climate and government programs, all content on this page should be verified and vetted for accuracy and relevancy.

PPP Loans

So either it starts on April 29 or if you are on a bi-weekly or more frequent payroll.  You could choose on your discretion to start it on the next payroll period after April 29 starts, but only if you are on a bi-weekly or more frequent payroll schedule.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

Well, I think, the way that I read it because you’ve got the payroll used in two different ways. You got the historical payroll that’s used to calculate the amount of money that you can qualify for. Once you do that, forget about it. That’s over the next issue of forgiveness has to do on what you spend it on going forward and looking at payroll from that perspective is a different issue. So that’s what you actually spend not what you’ve historically made the historical number just deals with what you qualify for now the payroll costs include for sole proprietors in the way that they frame its got that hundred thousand dollar cap. But if you spend it on disbursements to yourself during the coverage period and you’re not compensating, you’re not drawing more than would give you essentially an income over $100,000 a year, or that would be forgivable.

That counts as the payroll costs even though, for owners, they recognize that it comes out differently. Like, you may be doing. And just as a disbursement or distribution or something along those lines, you have got to spend it. So, your historical income is no longer the issue for purposes of the forgiveness of the payments.

Track those disbursements. The simplest thing you can do is when you get the PPP money open a brand-new bank account and use it for nothing but those allowable uses, so its super easy to track. 

– Wyatt Johnson (04/23/20)
https://youtu.be/JgrdOO7jYOg

You need to pay the payroll expenses. You need to pay the rent if the business isn’t operating. I don’t think that that affects the forgiveness. It’s just that it’s got to be on the expenditures, but they want you doing is they want you spending that money on your employees and your necessary expenses. 

– Wyatt Johnson (04/23/20)
https://youtu.be/JgrdOO7jYOg

The rules have not given a lot of guidance yet, other than to say, you will need the records to justify the payments. If it’s payroll, for example, then I think the payroll records or the checks that were made, that sort of thing would be the kind of documentation that you’re going to want to keep. If it’s rent, you’re going to want to have a copy of the check of the rent that was paid and maybe an invoice for what period was, for now, essentially the most official documents that show that the expense was made for an allowable use in the correct period.

The process that is going to happen is the borrower is required to go to the lender and say I want forgiveness, so don’t expect your bank, just to come to you at the end of the eight weeks, you have to, you have to go to the bank and say, hey, I want to, you know, apply for forgiveness of my PPP. The banks are in the process now of creating their procedures, and they will have 60 days to process your forgiveness request.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

This applies to what we call rule number four, which is the headcount rule you would have to meet it. I think that the reason why you have two choices.

Have a look back period for headcount. You have the first two months of this year, or you have a period that is, you know, about a year ago. So, the February 15 to June 20 period last year. The reason why you have two choices and can pick the lower headcount is that you know there’s a realization that some of this kind of thing of employees quitting or that sort of thing is going to happen. So they wanted to set a headcount standard that is reasonable. Whatever that headcount is that full-time equivalent headcount, whether it’s the first two months of this year, or it’s that time period of last year, you, you will have them to meet it.

So with respect to what we call rules, four, and five. So the headcount rule and the individual employee reduction of no more than 25% pay rule. There is what people are calling an exception or a safe harbor, that sort of thing to that rule and the way it’s being described, at least in some of the articles. What’s going out is that rules four or five don’t apply if, by June 30, the business brings back the headcount that was in place at that time, or they bring back wages up to at least 75% by June 30, 2020. There are two real big unanswered problems with that quote-unquote safe harbor.

The first is that it’s written in a section of the statute and a manner that is probably the poorest drafted portion of the entire statute, it is incredibly difficult to read. It does appear to say, hey, you could just bring everyone back on June 30, and as long as you do that, you’re fine. But that has inherent to it. Two major problems. One is I just highly doubt that Congress intended to set a rule where you could just bring everyone back for one day. On June 30 and then fire them on July 1 because there’s no kind of limitation in that rule on. You have to keep them around for a certain amount of time, and if the rule means what everyone is sort of saying means, then, that to me, is a very peculiar kind of result, so I hesitate there.

The second is that in order to meet the 7525 rule of using at least 75% of the funds for payroll costs and the other 25% for non-payroll costs, you’re going to have to bring everyone back for the eight weeks. So if you’re thinking, Oh, I’ll be so smart and get around rules, four, and five by just, you know, waiting to the very end and bringing everyone back on June 30 you likely will not be able to use very much of the money for forgivable purposes. As a practical matter, again rules, four, and five. They get swallowed into the, into rule number three. If you are using the money, you know 75% for payroll and the other 25% for non-payroll.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

One thing you could, at this point, plan on doing, is for all the day’s work in the eight week period you pay and plan at the very end, not to have a lag between the last day worked and when the payment is given. So in Hawaii, you have seven days to pay after the pay period, but you may want to just make a payment on the very last day. That said, I think it’s likely the SBA issues, some kind of gentler rule. But until they do. I mean, that’s the only thing we know for sure.

– Darin Leong (04/23/20)

We were expecting the EIDLs to come faster to and I think that was the intent believe there’s actually a requirement for the grants or advances to be funded in three days. I think it was just not feasible. I mean SBA process something like 14 years of loans and 14 days so and a practical matter, EIDL has gone much slower than PPP has.  You are correct, though, that $10,000 grant or whatever the amount is of the events is going to reduce the PPP forgiveness by that amount. So there’s no double sort of counting there.

Hold onto that $10,000 advance. You would keep it, but just know that in the forgiveness. When you apply for forgiveness of the PPP you know say your forgiveness amount is $20,000 you’re going to have to subtract the $10,000 of the EIDL grant so your forgiveness will be 20,000 minus 10,000.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

PPP Plan is part of 7A and so you can have a 7A with greater than the amount of the PPP except that the amount above the eight-week measuring period afterward will be converted to a term note. You cannot have a 7A and EIDL loan together with one or the other but not both.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

There is a provision that says the amount of eligible expenditures and an eight week period if it falls below. If the wage amount falls below a certain level, and the amount of forgiveness is reduced. If there is a reduction in the number of employees or a reduction greater than 25%, in a way, just paid employees BUT YOU HAVE UNTIL JUNE 30 to correct that because this program is available through the end of the year. So even if you don’t apply today, even if you’re not impacted by the downturn today. Maybe down the road in September. If it becomes an issue. You can still apply. But I’m not quite sure what how that June 30 date would fit and on that.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

Yes. So, the rule that applies here is the headcount rule which you know we just label as rule number four which says that you need to keep the average monthly number of full-time equivalent employees. It does not say you have to keep the same ones. My caveat to that is it leaves open a little bit of potential mischief.

We have seen with to your point earlier Dale we’ve seen a very, very expansive and liberal rule-making.

Coming out of SBA and Treasury some of the rules that SBA and Treasury have issued are quite frankly plainly contradictory to the statute. Other rules completely are made up like the 25% 75% rule that appears nowhere in the statute. It’s completely made up. I go on this with sort of the guiding principle of if it seems a little bit like mischief, then you might want to just stay away from it, even if there is no overt prohibition now. The mischief is I don’t like this employee. They were junk and already laid them off. I don’t want them back. But to get my headcount up I’m going to hire my brother, my mom and my sister. As a technical matter. There is nothing in the statute that prohibits that, but as a practical matter, I would be very worried about doing something like that.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

Yes. The amount of forgiveness is going to be based on the math whether it covers the amount of the loan that was drawn, even though they may be working partially and the amount of forgiveness is potentially reduced if the actual payroll during that eight week period is less than the average over the, over the last year.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

If you have payroll everything about the payroll protection programs about is about payroll. That’s the only thing I can be clear about is that if you have payroll, you should be fine, because that means you’re operating at a loss to still pay people. So everything with PPP is about payroll.

– Suzi Berget-White(04/16/20)
https://youtu.be/arVXVR_5GeY

So until you sign the loan documents you’ve only applied, you haven’t actually signed on the dotted line yet so you’ll have the opportunity to discuss terms, essentially, and talk that over. Depending on at least for the EIDL, you have the ability to say no. With that loan with the PPP, I’m not sure what they’re actually asking on the back end from the institution. So I know what the SBA loan paperwork looks like, what the application actually looks like in terms of what you are signing on the dotted line with that particular banking institution at the end of that application. I do not know. And so I would just look back at the contract or the application that you signed to see what it says on the dotted line there for you.

– Suzi Berget-White(04/16/20)
https://youtu.be/arVXVR_5GeY

That appears to have a necessary and required piece to it, but could also kind of go off the rails. It is the first interim rule the SBA Treasury actually did some math on their 75% 25% rule. And if you use if you are required to use and expected to use a full 75% of PPP funds. For payroll costs if you bring everyone back at 100% you will probably still fall short of 75% you will probably end up right in the 74ish percent range which means the only way that you could get to 75% is to pay a bonus or to add another employee on so for that reason is why I think that sort of reasonable bonuses or bumps in pay probably will be allowed, especially if it’s kind of business justified.

For example, working hazard pay during COVID-19. That seems like a valid justification for a bonus, rather than just a bonus for no reason. The front end of that answer is that bonuses are actually probably required for many employers in order to get to 75%. The mischief on the back end of that is crazy bonuses that look like it’s just funneling money a certain direction don’t work.

 I think there is some already built-in protection, which is that for owners are kept on the amount of pay that they can funnel toward themselves and it’s capped at what essentially the rate of pay that they got last year. So, I’m the part where I would be very concerned would be where an owner essentially bonuses themselves or someone you know with similar interests in a manner that pushes their pay up beyond what it normally otherwise would have been. I would be less concerned if it’s going straight to line-level employees for hazard pay and that sort of thing.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

For amounts that are forgiven, the expenses you paid for it have to be reported which effectively causes it to be taxable.  If you use the money to pay payroll expenses, you’re not allowed to duct the payroll as a business expense.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

For more information on PPP go to: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

PPP Loan Forgiveness

The EIDL advance will reduce the amount of PPP forgiveness by the amount of the advance.  The advance will still reduce the forgiveness amount because it’s presumed to be for payroll cost.  The loan portion of the EIDL will not affect the PPP and has a broader range of uses.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

The advance is the overlap portion. The advance will reduce the PPP loan forgiveness amount by the amount of the advance.  The loan portion of the EIDL would be treated separately.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

The cleanest way is to have a separate account for the PPP funds themselves and as you are expending them from that account notate where they are going and the documentation for it.

Another way to do it would be you pay your payroll and then you reimburse to your business account from the PPP account and notate exactly what that reimbursement was for and have documentation of the payroll registers or the rent check receipt so that you have a nice clear organized way to identify where the PPP funds went.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

Yes.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

Independent contractor’s payments do not count either for the calculation of the loan amount or for forgiveness or for allowable use.  Technically an independent contractor is a separate entity from an employee.  So an employee would fall under your business umbrella.

An independent contractor is technically a separate business that would have the opportunity to apply for their own PPP loans so independent contractors should be completely excluded.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

Whichever the lender who gave you the money, they are going to have an application process whether its electronic or a paper document.  It’s going to track the forgiveness application form that the SBA published a week ago.  So you can find the form on the Treasury Website.

There is a link on the website with a big list of resources and the forgiveness application where you can look at it.

The way that I explained it today is that rules that make up the application form are drafted similar to an IRS document.  It has instructions and they are essentially applying what I described as the rules today.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

Any number of things.

If you received the loan and were not supposed to receive the loan and you were the type of business that is disqualified for qualifying for the loan.  If for any reason you have the loan and you shouldn’t that would not count. If you violated the terms of your certifications either in the application for the loan or forgiveness.

The most recent final rule has a list of scenarios where disqualification would occur.  On the Treasury Website, find the most recent interim final rule for loan procedures on May 22 which would have this list.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

For More Info on Loan Forgiveness Go To: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

EIDL Loans

It will only be considered as a loan. There is a $10,000 component that may be considered as a grant if certain circumstances are met.  Unlike the PPP it is a loan that has to be repaid over time there is no forgiveness on the EIDL.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

It’s going to be equipment and the assets of the company or business and would potentially require a personal guarantee.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

So, for the EIDL Loan. No. For both of these loans, actually you can be self-employed, you can be a sole proprietor for both of them. It’s kind of a tricky question depending on how you pay yourself, but you know that’s not necessarily the case. You don’t necessarily have to have payroll, you can have 1099 or skip see income to apply for these things.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

It’s really difficult to make edits at this point, just because you’re kind of in the queue and where those edits can really take places when you get the opportunity to finally talk to your loan officer. I would save your edits for there. I’ve gotten this question a lot and I people keep thinking because we’re part of the SBA we’ve got access to these applications. We do not and even my district offices at the state level, do not have access to those things either. So I would say save your edits and make sure that you’ve got a clear, concise list of things that you’d like to discuss when you do get the option to talk with a lender.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

Well, in the EIDL loan, if you look at my webinar, you’re going to see where I actually point this particular item out. I’m going to pull the exact terminology.

On the EIDL specifically, it says rental properties residential and commercial only loss rents due to the disaster. I know that a lot of people have Airbnb properties vacation rentals and then they have you know obviously properties where they just rent out for a month, month, or on an annual basis.  know that that’s where people have been filling out that information right there in terms of the PPP be difficult. Obviously, you have no employees. I’m going to be really honest about the payroll protection program. It’s really great. If you have payroll. It’s not a great system if there if you don’t have payroll, because that’s what the whole program was designed for.

EIDL loan is a better option for you anyway. So, I would apply if the ability becomes available for you to apply for the EIDL Loan and there’s a specific spot where you can put in the loss of a wrench that you’ve experienced since the beginning of the disaster.

– Suzi Berget-White(04/16/20)
https://youtu.be/arVXVR_5GeY

For more information on EIDL go to: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

Expenses

Payments under services service agreements dated before February 15, 2020, so the emphasis is you can’t just tap on something now. It needed to be in effect a few months ago. But the utilities include electricity, gas, water transportation telephone access. Some of those are easy like water or telephone internet, that sort of thing. The one big question we get a lot is, what is a transportation facility and the only guidance SBA has given as they said gas for a business vehicle counts, but they have not expanded beyond that.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

That we presume its both. That’s a telephone utility.  I don’t think there is a distinguishing feature between a landline or a business line or a mobile phone.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

It would be if it keeps you under that hundred-thousand-dollar cap. But if it’s going to take you over that hundred-thousand-dollar cap on, then yes, it would not be allowed.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

Rent because there’s no other guidance on it. The best I could find is some internet definitions of C.A.M that say it’s a component of rent. Which would be a good faith basis to include it. But, you know, as a technical matter SBA and Treasury have not specifically said whether C.A.M counts.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

I think that the statute is very clear that June 30 is the end date for allowable uses and if there are no other allowable uses of the money, then presumably you’d have to give it back because you’re not allowed to use it past June 30 the caveat to that is definitely see a situation where SBA or treasury changes that rule and maybe they provide clarification on it soon. So the takeaway point is I think it’s very risky to think that you will be allowed to use the money after June 30 but it’s certainly possible that SBA or treasury issue or rule and say something to the contrary.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

You have your simple stuff that everybody can think of, that’s going to be, your salaries, your wages. That’s easy.

Second, Cash tips or equivalents anything. I think if the tips, go through the company that’s still probably easy. Leave if you pay vacation family medical or sick leave that’s a payroll expense. If you pay the healthcare benefit premiums, healthcare insurance premiums, though, for your employees, that’s part of your payroll expense.

Retirement benefits and maybe the disability might fit in there but you know your retirement benefit benefits. That’s going to be 401K contributions and things like that. Payment of state or local tax on the employees but not federal. That’s what it includes, what it does not include is and I think that the real gap is. Where you have highly compensated employees, say somebody who’s making $120,000 a year. Any portion of that wage or salary that would be attributable basically the, I guess the pro-rata monthly share that an additional 20,000 year above the one hundred is going to exceed an allowable payroll cost. 

– Wyatt Johnson (04/23/20)
https://youtu.be/JgrdOO7jYOg

If it’s rent that’s used in your business. I think whether it’s storage or whether it’s the facility. I don’t see any difference that would seem to be critical was that, to the extent that you’re using a percent of your business properties. That no more than 25% of the total loan goes to that. So I think if you’ve got a storage unit and it’s part of your business and you’re paying rent for that I think that falls under the intent of the act.

– Wyatt Johnson (04/23/20)
https://youtu.be/JgrdOO7jYOg

The only one that the SBA has given an example of is gas.  For utilities, it would be gas.  On non-payroll expenses for transportation business vehicles, the leases appear to be included as non-payroll costs.

– Darin Leong (04/23/20)
https://youtu.be/QXSQHbdMHdI

Employers

It starts at disbursement. So, it literally starts the moment the money is dispersed, or the day the money is dispersed, and then the eight-week window for forgiveness runs from there. The biggest question that I’m sure you have is: Well, normal payroll doesn’t work that cleanly? Some of the payroll days are going to fall within the eight weeks. Some are going to fall out of the eight weeks. And it’s going to create some administrative hassle.

The only thing we know for sure right now is that if the date worked within the eight weeks and it’s also paid within the eight weeks that it’s going to count. What we don’t know is if the day was worked the week before disbursement, and you’re paying it now in your eight-week window, whether that will count. We hopefully expect more guidance on this issue by Monday, April 27th.

One thing you could, at this point, plan on doing, is for all the day’s work in the eight week period you pay and plan at the very end, not to have a lag between the last day worked and when the pay is given. So in Hawaii, you have seven days to pay after the pay period, but you may want to just make a payment on the very last day. That said, I think it’s likely the SBA issues, some kind of gentler rule. But until they do. I mean, that’s the only thing we know for sure.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

Yeah, so a 1099 employee is a contradictory term. There is no such thing as 1099 employees. So it 1099 as a technical matter goes to an independent contractor versus a W2 goes to an employee who’s paid wages. The major distinctions and how they’re treated are you know employees fall under the arm.

The employer and the employer is taking out withholdings are taking our Social Security, Medicare, etc, An independent contractor who was given 1099, on the other hand, ss technically considered to be a totally separate entity and that entity has its own ability to file for its own PPP, and also that entity, if it has employees and that sort of thing, those employees fall under that entity.

Fully realizing that this is one of the areas in sort of the normal world that get blurred because people are often treated as independent contractors when they probably should be treated as employees, this is, this is not a time to start treating those contractors as your employees so that you get the benefit in PPP, but then you know essentially take another benefit and how you’ve treated them normally. If they’re on 1099 you should presume that they are an independent contractor and can file their own PPP.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

As this relates to which taxes which employment taxes count. I’ll also point to the first interim final rule, which is on that same website the Treasury website, which I think was issued around early, early April, but it’s labeled as interim final rule one on that website and there’s an example in that one. I believe either there or it’s in the Q and A’s, but

What you’re allowed to do is count the federal withholdings for the employee side so social security and such. That is the employees share that the employer normally takes out that that’s counted in so that that counts as payroll costs.

What you’re not allowed to count is the employer’s share. So for example, if the employer is paying $4,000 in wages. But what the employees actually getting in their paycheck is you know $3,000 because a bunch of withholdings was taken out. You can count the $4,000, what you cannot count is that you had to pay an extra tax on top of that $4,000 for the employer share of federal payroll taxes.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

So the example would be if say there’s $4,000 in gross wages and there are the employer side and the employee side of federal employment taxes right Medicare and Social Security. So the employee half of it counts toward the payroll costs.  Essentially the full $4,000 would get counted, even though the employee side in what they get in the paycheck will get taken out and they’ll get something like 3000 something that you cannot include in payroll costs is the employer portion of the of those Social Security and Medicare.

Each state also is taking its own stance on whether this money is taxable both under the general excise tax and as income. So we push this to The Hawaii Tax authorities, we’ve gotten sort of an informal comment that they think it will likely end up being state income tax, but they don’t know whether it’s G.E.T qualified.

I think that’s an unofficial position. So we really still don’t know. But it’s something to keep on the radar in terms of calculating the benefit to you have the money. The other sort of weighing the actual benefit of the money is that just remember again, So if you are paying the payroll costs out on that employer side of the unemployment tax, you’re going to have to bear it. And it’s not going to be forgivable and then there may also be some other like workers compensation, TDI, that sort of thing that you will end up having to pay. So, you know, if you’re calculating, the benefit of bringing an employee back you will need to keep that in sort of senior in your head.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

This was a big fear that is coming to fruition in less degree now. The federal unemployment adds a $600 add on to state unemployment and it goes through July 31. What that means is if the employees actually getting the unemployment check which, in our state has not really been happening yet, but probably soon. The employees going to make more on unemployment than they would for wages for any sort of lower-paid employees. So the fear for employers is that the employees won’t want to come back. They want to stay on unemployment. The big sort of missing piece to that is, if an employer offers the employee 100% wages and hours to come back. The employee will likely forfeit and in Hawaii, we are quite certain that they forfeit the entitlement to unemployment because essentially the requirement for unemployment is that you have to be available and willing to take on work.

 If work is offered to you, the employee then and you decline it you forfeit the eligibility for that unemployment. What the employer can think about doing is, and many unemployment offices already asked for this information.

Is writing to the unemployment office and saying I made a offer to the employee to come back at 100% wages and hours and they declined arm. That almost certainly will end up meaning that they will not qualify for unemployment.

 We’ve actually bounced this question on some webinars off of our congressional leaders, is that I really think that what Congress was doing here is making a determination that they’re going to subsidize workers.  Is it better to do it through payroll, or is it better to do it through the unemployment system and the clear determination is that it’s better to do it. By having employees on payroll because when it’s time for the economy to get back up and to get rolling again be back in business.

The data is very clear that it’s much easier to get people who are already on payroll back working and it is to get someone off of unemployment. So, you know, that’s just sort of a commentary on I think what the intent was.

– Darin Leong (04/23/20)
https://youtu.be/JgrdOO7jYOg

I don’t believe so.  You’re going to have to under the PPP plan provide documentation of how that money is spent within that eight week period.  That documentation will be adjudicated by the bank for them to approve or deny.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

Well, the main measurement is the average monthly payroll over the past year from a year from the time you apply. Now there are some different rules for new businesses. So if you weren’t in business as of February 15, 2019, then there’s a shorter measurement period, and from January 30 or February 15 I don’t remember which off the top my head of this year to the end of March. So, you’ve got another possibility of how to measure the average monthly payroll, and then seasonal businesses have a different calculation that the US.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

Yes. If your applying for these loans you still need to have the 2019 information ready. You don’t need to have your taxes done but you’re still going to need those payroll reports.

– Suzi Berget-White(04/16/20)
https://youtu.be/arVXVR_5GeY

No, that is a reimbursement. Okay, the per diem pay would be a reimbursement. So no, that would not be included.

– Terry Frisk(03/31/20)
https://youtu.be/L9EaeD7Ymgk

Officers would not necessarily be considered an owner.  It would be people with an actual ownership stake in the business whether they are owner-employees or owners.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

If its health insurance for an owner then it just gets rolled into that maximum. For the owner whether its net income compensation or paid any other way.  The maximum amount caps out at $15,385.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

I think that would be the situation of whether that spouse has ownership of the entity itself. There is no explicit guidance from the SBA or treasury on that point. So, taking the guidance on its face is just actual owners, regardless of marital status.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

I think that it would not count.  I think that it would fall under the voluntary reduction in hours which the SBA has said that is excluded.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

So as the sole proprietor you are 1099 not that you are paying someone else at 1099 which makes it a simpler calculation.  You are going to be maxed out at 15,385 or whatever your 2019 compensation was, the lower of that amount. 

So if your 2019 schedule C, for example, your self-employed income calculation was 50,000 dollars then that’s going to be the upper limit of your forgiveness amount prorated over the eight-week period.  If you made 50,000 dollars in 2019 than your amount would be just shy of 8,000 dollars.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

It’s a total of 15,385. That’s the upper limit regardless of what’s going into it for owners’ sole proprietors or self-employed etc.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

The owner draws would fall into the owner category.  You would apply the rules on the net profit or net distributions capped at 15, 385, or your 2019 compensation whichever is the lower amount.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

There were procedures, for example, partnerships, where the loan amount was too low.  They were allowed to go back to the bank and have the bank correct the amount.  So I would say to check back with your bank or lender on correcting the loan amount. The same goes in reverse.  If you got too much it’s a good idea to go back and correct it so that you have the correct loan amount.  There are all kinds of government agencies looking for fraud right now.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI

It would qualify as the net income to the owner subject to the 15,385 or the maximum of your 2019 compensation was.

– Darin Leong (05/26/20)
https://youtu.be/QXSQHbdMHdI