restuarant PPP vs Paycheck retention

[WITAXLADY]

Restaurant received $76,000 in PPP - used for that.. and now it is time to do paperwork

But if they take that as a low interest loan over X years at about $350/month payment- as times are bad...

They then instead can get abut $56,000 thru paycheck retention - will pay off their 2019 and 2020 amount owed to the Fed for withholding, SS and Medicare

Is it worth taking the $76,000 loan to get a $56,000 credit?

They should now be able to get the 2nd round PPP and they would be in good shape.

And they are still waiting on the $150,000 EIDL from SBA that is out there since April? That would go towards an elevator for their second floor - have a landing so stairs complied but need for banquet/weddings/concerts access.

Comments?

Thankyou

Darlene from sort of snowy WI

 

[Lee B]

1.  Be very careful with EIDL Loans,  There are a lot of very restrictive covenants that could hamstring a business.

2, Yes you can do both a PPP Loan and the retention credit, but you have to really thread the needle to make them both work together.

3. I have one client who qualifies for a second PPP Loan, which we are seriously considering since it offers the most flexibility.

[DANRVAN]

7 hours ago, WITAXLADY said:

They then instead can get abut $56,000 thru paycheck retention - will pay off their 2019 and 2020 amount owed to the Fed for withholding, SS and Medicare

Is it worth taking the $76,000 loan to get a $56,000 credit?

Darlene, from your post it appears you might not be aware that there is a provision in the Consolidated Appropriations Act of 2021 that allows an employer to take both the PPP (with forgiveness) and the ERC in the same year.  However, you can not use the same payroll expense for both in order to prevent double dipping.  

You can amend prior 941 for unclaimed credits.