The Paycheck Protection Program (PPP), part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. The act provided billions in funding for small business relief across the country. D & S Management Services helped our clients obtain much needed PPP funding. On Friday, June 5, 2020, the Paycheck Protection Program (PPP) Flexibility Act was signed into law as a standalone legislation designed to ease current PPP forgiveness requirements, one of those being to extend the covered period from 8-weeks to 24-weeks. (Please see our other blog post on the PPP Flexibility Act). As we transition with our clients into the forgiveness portion of the PPP loan, we have assembled the following information to aid in applying and receiving PPP loan forgiveness.
1. Application (Lender)
To receive loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (Form 3508EZ) to their Bank where they received the PPP funds from.
Once you have met the criteria for forgiveness, you may submit a loan forgiveness application any time between the period starting two weeks after the date of your loan and ending before the maturity date of your loan. You do not need to wait until the end of the 24-week covered period to apply.
D & S Management Services will help their clients complete the Loan Forgiveness Application and submit it with the required documentation to their bank.
2. Decision Issued (Lender)
Within 60 days from receipt of the completed application, the bank will review the application and issue a decision regarding loan forgiveness to the SBA.
3. Forgiveness Amounts Remitted (SBA)
If the SBA determines the borrower was eligible for full forgiveness:
If applicable, the SBA will deduct EIDL Advance Amounts from the forgiveness amount remitted to the Bank.
If the SBA determines that only a portion of the loan is forgiven, or that the borrower was ineligible:
Mortgage interest, rent obligations, and utilities
Bank account statements or third-party payroll service provider reports (D & S Management Services) documenting the amount of cash compensation paid to employees (gross wages).
Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the covered period or the alternative payroll covered period:
The average number of FTE employees on payroll per month employed between:
Other expenses (mortgage interest, rent, utilities)
As the PPP loan’s covered period draws to an end, D & S Management Services looks forward to aiding their clients with their forgiveness application. When requested by your bank or the SBA, it is important to be able to provide proper documentation for the PPP loan money spent on the above outlined covered expenses. As your remote accounting office, we at D & S Management Services have compiled the necessary required documentation. Running a business, such as a Domino’s, during these times is hard enough. You have a lot on your peel, let us at D & S Management Services help you with all your accounting needs.