At K&R CPA’s and St. Louis Tax Prep, we’re trying to keep all our clients on top of the constantly-shifting sands of Covid-19 and its impact on your business, finances, and taxes. https://www.finimpact.com/covid-19-coronavirus-smbs/
Act fast to get your slice of additional SBA funds
An additional $484 billion in COVID-19 small business assistance is now available, including $310 billion in new money for the Small Business Administration’s (SBA) Paycheck Protection Program.
Get your Paycheck Protection Program (PPP) loan application in now
If your business has not already done so, you need to get your Paycheck Protection Program (PPP) loan application in the hands of your banker NOW! The newly-available funds are expected to be claimed within a matter of days.
The program, created by the CARES Act, is an SBA low interest loan designed to help small businesses hurt by the coronavirus pandemic. Businesses can apply for a loan equal to 2.5 times their average monthly payroll costs. If 75% of the loan is used to pay salary and wage expenses, a portion of the loan may be eligible to be forgiven. Even better, your first loan payment is deferred for six months and initial interest rates were one percent .
Original funds in the program went quickly. Thankfully, we are being told a portion of the new funds are being reserved for regional and smaller banks so the help can get to main street businesses like yours.
Take action: Contact your bank immediately. They will direct you to the information required to apply for this program. Stay on them! Once the bank approves your application, it will be submitted by them to the SBA. The SBA will then confirm and approve the submission. Then all you can do is wait.
More money for EIDL grants
The new law also provides an additional $10 billion for funding emergency loan grants. The Small Business Administration is providing a quick, $10,000 grant with no repayment required, through their Economic Injury Disaster Loan (EIDL) program. The original program was shut down after all the available funds were given out.
Take action: For the $10,000 grant you must visit the SBA. Here is a link to the application site:
Check the site immediately and every day to know when they will start taking new applications. Be prepared with your company information and bank account information. Once approved, and if you are lucky enough to receive a grant, your bank account will receive the funds directly.
These new funds will not last long, so you will need to move quickly if you wish to help your business during the pandemic.
We found this informative article detailing the Paycheck Protection Program Loans provision of recent legislation to help owners of small businesses impacted by the Coronavirus and business closures. Learn more about the program from small business lawyers. As always, we are available to help you understand the accounting and tax implications of these new programs.
We have discovered from communication with the SBA and local banks that this loan will be processed by local small business bankers. At this time the local banks are still trying to sort through the Payroll Protection Program process and work out the lending application/funding details. As is the case with most government programs, the concepts are passed at a very high level, and the details are left to be sorted out. Some local banks are saying they can take the paperwork, others are saying they are still working on this. Our suggestion is to communicate directly with your small business banker and work with them on preparing the paperwork they may require.
Our office is collecting information in real-time from local bankers and trying to provide as much guidance as possible to our clients.
Again, at this time, our guidance is to communicate with your small business banker, gather documents and fill out the forms they may have available so that you are ready to file the loan documents.
Possible Application Materials:
Applications must include documentation verifying the number of full-time equivalent employees on payroll and pay rates including:
- Payroll costs (including paid sick, medical, vacation family and costs related to the continuation of group health care benefits during periods of leave)
- Employee salaries, wage commission or other similar compensation, cash or tip
- Payments of interest on any mortgage obligation, not including prepayment or payment of principal on a mortgage obligation
- Allowance for dismissal or separation
- Payment of any retirement benefit
- Payment of State or local tax assessed on the compensation of employees
- Rent (including rent under a lease agreement)
- Utilities (distribution of electricity, gas, water, transportation, telephone or internet access)
Jeremy Klaven, CPA
#1 First Missouri Center, Suite 214
St. Louis, MO 63141
cell: (314) 583-6515
fax: (314) 754-9967