Jump to content
ATX Community

PPP scenario


ILLMAS

Recommended Posts

I prepared a PPP loan application for my largest client yesterday thru a local bank.

The local bank had a much more detailed application asking questions about how many employees had been laid off due to the coronavirus.

How many employees would be reinstated, on what date and the payroll cost of reinstating those employees etc.

 

  • Like 2
Link to comment
Share on other sites

22 minutes ago, cbslee said:

I prepared a PPP loan application for my largest client yesterday thru a local bank.

The local bank had a much more detailed application asking questions about how many employees had been laid off due to the coronavirus.

How many employees would be reinstated, on what date and the payroll cost of reinstating those employees etc.

 

Thanks, one of client has also asked me to help them, apparently banks are asking their clients to pre-fill the application and they will take care of the rest.

Link to comment
Share on other sites

15 minutes ago, cbslee said:

I have another client with a large Northwest regional bank, who is not even accepting applications yet.

Just to confirm, you help your client with the pre-application, not the application that is sent to the SBA?  A client of mine just called me to let me know, a tax preparer is submitting applications which I find hard to believe.

Thanks

Link to comment
Share on other sites

5 minutes ago, cbslee said:

I completed both the SBA and the bank's application, had my client sign them and submitted both applications thru the bank's  portal.

Thank you, the banker for another client already added me to their portal.

 

Link to comment
Share on other sites

6 hours ago, ILLMAS said:

Let’s say a landscape Co. has two employees (husband and wife) that earn $30K each and they have 6 subcontractors each earring $20K, what do you predict the outcome (PPP loan) to be or shocked?

Just had a random thought 

Unless something unexpected pops up, they would be eligible based on their averages allowable payroll costs based on the H&W (the employees).  The contractors are on their own.

My bank was easy to apply online, once they told me to (they had a virtual queue).  (Helps that I do my own payroll...)  The SBA form, with about 4 or five bits of extra (to likely help with the calculation), and controlling interest people information.  Had to submit 941 forms and a payroll summary as of Feb 15.  I "added" a sheet showing how I calculated the amount I entered since their instructions did not mention, or even ask for allowable health insurance costs, and since they are not shown on a 941.

Best to apply with a bank you have an account with, as the bank is allowed to process their own customers first.

The one delay was the online service they used for the document was a bit slow at first.  I suspect it was because they were trying to verify the signing person;s identity through a credit bureau type system.  I think when mine went through, they disabled the identity verification online, and will likely identify me via my account records.

  • Like 1
Link to comment
Share on other sites

7 hours ago, ILLMAS said:

Let’s say a landscape Co. has two employees (husband and wife) that earn $30K each and they have 6 subcontractors each earring $20K, what do you predict the outcome (PPP loan) to be or shocked?

Just had a random thought 

The Economic Injury Disaster Loan might be a better way to go for your client. 

Link to comment
Share on other sites

21 minutes ago, cbslee said:

The Economic Injury Disaster Loan might be a better way to go for your client. 

Must compare all possibilities to know which is most beneficial.

PPP, somewhere between 8 and 20k eligible (the higher is if they can include health care costs), which likely the 2x factor is eligible for forgiveness, and likely the entire amount.  The other loan offers more cash (I am too blurry to remember if it had a small grant component) now.  There is also the possibility of one spouse being eligible for FFCRA leave, or possibly, the 50% credit if their income drops the required amount for any quarter (max $10k benefit for two employees).  Then you have to chart if the business can have more than one, which can work together, and which preclude one or more of the others.

The key is having any accurate ability to project income for the remainder of the year (in addition to good payroll records at your desk).

Link to comment
Share on other sites

6 hours ago, cbslee said:

The local bank had a much more detailed application asking questions about how many employees had been laid off due to the coronavirus.

How many employees would be reinstated, on what date and the payroll cost of reinstating those employees etc.

 

From what I have read layoffs and rehiring are not a condition for loan approval, but would help with certification of economic uncertainty.

Link to comment
Share on other sites

2 hours ago, DANRVAN said:

 

From what I have read layoffs and rehiring are not a condition for loan approval, but would help with certification of economic uncertainty.

What you say is true as far as the SBA application goes. I am referring to what the local bank is using for it's screening criteria.

Link to comment
Share on other sites

Bart, both what? There are half a dozen programs already, some of which are mutually exclusive. Not all are payroll based, but I think all can be used to meet payroll or provide paid time off. You have Section 7(a) traditional loan, 7(a)(36) paycheck protection loan, 7(b)(2) disaster loan, payroll tax credit in a couple different flavors, payroll tax deferral, EIDL, and more letters of the alphabet. How long does it take you to work out which is best for a client?  

Link to comment
Share on other sites

2 hours ago, cbslee said:

I am referring to what the local bank is using for it's screening criteria

I was wondering why the bank asked the question.  It does't seem right that they could give preference to a business that has lay offs and rehires vs one that is trying to maintain and keep form laying off; since either way they could qualify.

Link to comment
Share on other sites

9 hours ago, Lion EA said:

Bart, both what? There are half a dozen programs already, some of which are mutually exclusive. Not all are payroll based, but I think all can be used to meet payroll or provide paid time off. You have Section 7(a) traditional loan, 7(a)(36) paycheck protection loan, 7(b)(2) disaster loan, payroll tax credit in a couple different flavors, payroll tax deferral, EIDL, and more letters of the alphabet. How long does it take you to work out which is best for a client?  

I was referring to EIDL and PPP as the two I know of best.  A business can get both.

Link to comment
Share on other sites

9 hours ago, DANRVAN said:

I was wondering why the bank asked the question.  It does't seem right that they could give preference to a business that has lay offs and rehires vs one that is trying to maintain and keep form laying off; since either way they could qualify.

One national bank, Chase I believe, is only accepting applications from businesses that have both a checking account and a credit card with Chase.

Other banks are holding back because they don't like the SBA terms and rules for these loans.

Link to comment
Share on other sites

Yep, those two don't bar one another. Although, do you have to use different expenses, different employees to qualify? Or, to use for foregiveness? I'm just going into yet another webinar this morning. Tax Practice Pro Inc. with John Sheeley, if anyone's interested. Only $29. Biz this morning and individuals this afternoon at 2 pm EDT.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...