PPP Loan Forgiveness

Forgiveness Rules & Amounts   |   Forgiveness Reduction     Forgiveness Checklist   |    Forgiveness FAQs  |   Forgiveness Sample Scenarios  

Updated October 19, 2020We will closely monitor and  update this page as details are released.

 

Loan Forgiveness Application

North Brookfield Savings Bank is required to follow SBA guidelines on loan forgiveness. 

The Small Business Administration released their official Loan Forgiveness Application which includes guidance and instructions to help borrowers on how to apply for PPP loan forgiveness. For those of you who received a Paycheck Protection Program (PPP) loan from the Small Business Administration (SBA) through North Brookfield Savings Bank, you may have questions about the attractive, yet confusing, PPP loan forgiveness feature and how you can take advantage of it. To provide clarity, we have compiled helpful information, a loan forgiveness checklist, sample scenarios and answers to your FAQs. If you have questions, contact your North Brookfield Savings Bank Business Lender at 508-637-0710.

PPP Loan Forgiveness Application

 

Streamlined Loan Forgiveness Application for Loans of $50,000 or less:

October 13, 2020 – The SBA released a two-page forgiveness application, Form 3508S, removing the requirement for calculations to be submitted with the application on loans of $50,000 or less. Borrowers that use SBA Form 3508S
are exempt from reductions in their loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. Form 3508S applies to borrowers who meet this criteria:

  •  PPP loan amount you received from your Lender was $50,000 or less.

 

EZ Paycheck Protection Program Loan Forgiveness Application:

June 17, 2020 – The SBA released a three-page “EZ” Paycheck Protection Program Loan Forgiveness Application requiring less documentation and fewer calculations than previously required. The digital application above will help you to determine which application is appropriate for your situation. Form 3508EZ applies to borrowers who meet any one of these three criteria:

  • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
  • Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
  • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

 

Paycheck Protection Program Flexibility Act (PPPFA):

On June 5th, 2020, the Paycheck Protection Program Flexibility Act was enacted easing restrictions and allowing greater flexibility for PPP borrowers to receive loan forgiveness. Here are the takeaways:

  • PPP borrowers can choose to extend their 8 week period to 24 weeks, or they can choose to keep the original 8 week period. This flexibility will allow more borrowers to obtain full, or near full, forgiveness.
  • The payroll expenditure requirement drops to 60% (from 75%). If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
  • Deadline is now December 31, 2020 to restore wages and workforce levels to pre-pandemic status, allowing borrowers to use 24 week period to make changes required for full forgiveness. Previously the deadline was June 30, 2020.
  • Two new exceptions allow borrowers to achieve full PPP loan forgiveness, regardless of if they do not fully restore their workforce. PPPFA states a business can still receive forgiveness on payroll amounts if it:
    • Is unable to rehire a previous employee who turned down good faith offers to be rehired at the same hours and wages as before the pandemic;
    • Is able to provide evidence of an inability to hire similarly qualified employees on or before December 31, 2020;
    • Is able to provide evidence of an inability to restore business operations to February 15, 2020 levels due to COVID-19 related operating restrictions.
  • PPP loan repayment is extended to 5 years from the previous 2 years for borrowers. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.
  • A two year deferral of employer’s share of payroll taxes for all employers that received a PPP loan is now allowed. This was prohibited under the CARES Act.

 

 

On May 15, 2020, the SBA released the loan forgiveness application and on May 22, 2020 the SBA released details to help clarify various aspects of loan forgiveness and inform on the SBA’s review process. Here are a few of the takeaways:

  • An “Alternative Payroll Covered Period” was introduced meaning that borrowers are not required to base forgiveness amounts on the 8-week period that begins with the date of disbursement.  Alternately, borrowers may choose to use an 8-week period beginning on the first day of the first payroll cycle after loan funds are disbursed (the “alternative payroll covered period”).
  • Costs Incurred but not Paid During Covered (or Alternative Covered) Payroll Period: These costs can be included in the forgiveness amount if they are paid on or before the next regular payroll date or the next regular billing date, even if it’s after the Covered/Alternative Payroll Covered Period.
  • A Full Time Equivalent (FTE) is defined based on a work week of 40 hours versus the standard of 30 hours for some other SBA programs and the Affordable Care Act. Calculate your FTEs.
  • Covered rent obligations and covered mortgage obligations include both real and personal property.

This is not a complete list of all of the updates to the new application. However, our comprehensive FAQs cover many of the details.

 


 

Forgiveness Rules & Amounts

As a Paycheck Protection Program borrower, you are eligible for loan forgiveness equal to the amount you expended during the 8 calendar week (or 24 week) period, beginning on the date of the origination of the loan (when the PPP funds were received in your bank account), for the following items:

 

Payroll-Related Expenses – 60%

At least 60% of your forgiveness must be attributed to payroll and payroll-related expenses during the 8 week (or 24 week) period, including the sum of any compensation payments pertaining to employees, which includes:

  • Salaries, wages, or comparable compensations. This includes overtime and normal commissions already structured as part of typical compensation;
  • Payment of cash tips or equivalent;
  • Payment for vacation, parental, family, medical, or sick leave;
  • Allowance for dismissal or separation;
  • Payment of state or local tax assessed on the compensation of the employee;
  • Payment for benefits including group health care and retirement benefits, 401K matches previously in your standard benefits package, disability or life insurance contributions, and payments to a Union to provide direct benefits to your employees, particularly medical;
  • Payments for Self Employed Individuals, Independent Contractors or Sole Proprietors would include a net income not more than $100,000 in one year.

TIP – DOCUMENT ALL EXPENSES – Thorough documentation of all expenses should be kept, prepared and available. Put together a “proof of expenses” folder should your loan be audited.

 

Unfortunately, these payroll-related costs below are excluded from forgiveness calculations:

  • Compensation of an individual employee in excess of an annual salary of $100,000 (Note: employer contributions to healthcare and retirement benefits are not part of amount deemed in excess of $100,000 annual salary);
  • Employer portion of payroll taxes (FICA taxes);
  • Any compensation of an employee whose principal place of residence is outside of the United States;
  • Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116– 5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act;
  • It is at this time unclear that paying yourself an owner draw or paying independent contractors (1099s) would be forgiven.

NOTE: The forgiven amount spent during the 8 calendar week (or 24 week) period is best to be used to pay current and future expenses.  There is actually no clear information saying whether expenses prior to the 8 week (or 24 week) period can be forgiven or not, however, to take the safe approach it would be suggested to only include expenses distributed during the 8 week (or 24 week) time frame for your forgiveness calculations.

 

Other Non-Payroll Expenses – 40%

No more than 40% of the final amount forgiven may be for the following other expenses:

  • Rent and utility payments
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Interest on other debt obligations, incurred before February 15, 2020

CALCULATION TIP: To determine the amount you can spend on the non-payroll expenses, multiply your full PPP loan amount by .40 and this will provide you with your non-payroll spending amount. The remaining 60% should be spent on payroll expenses only.

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Forgiveness Reduction

Your loan forgiveness amount may be proportionately reduced if you reduced your number of employees, or reduced employee compensation by more than 25% (for across employees earning $100,000 or less) when compared to prior periods.

Forgiveness Reduction Causes:

  • Reduction in Number of Employees: Your loan forgiveness may be reduced if you decrease your full time equivalent employee amount.
  • Reduction in Payroll Amount: Your loan forgiveness may additionally be reduced if you decrease compensation by more than 25% for any employee that made less than $100,000 annualized in 2019.

Avoid or Decrease Forgiveness Reduction:

  • Re-Hiring Employees and Restoring Compensation by December 31, 2020: Reductions may be avoided or decreased for PPP borrowers who rehire full time equivalents and restore compensation level changes (for changes made between February 15, 2020 and April 26, 2020) by December 31, 2020.

Exceptions:

Two exceptions allow borrowers to achieve full PPP loan forgiveness, regardless of if they do not fully restore their workforce.

    • Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic.
    • The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.

Calculate your FTEs

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Loan Forgiveness Checklist

We’ve compiled this checklist to help you begin to collect the needed documentation for your PPP Loan Forgiveness Application.

Download PDF & Print Checklist

 

SPEND ON THE CORRECT THINGS

You, the borrower, must ensure that your PPP Loan funds are used for authorized loan forgiveness purposes in order to receive forgiveness. 60 % MUST be spent on payroll expenses for forgiveness.

  • PPP loan funds must be spent on the outlined eligible expenses during the 8 week (or 24 week) period after your loan closing.
  • 60% of the expenses must be spent on payroll expenses to qualify for forgiveness.
  • No more than 40% of the expenses can be for mortgage interest payments, rent payments and utilities payments in order to qualify for forgiveness.

 

PROVE YOUR EXPENSES WITH DOCUMENTATION

As the borrower, it is important you maintain documentation showing how all loan proceeds were spent, including:

Payroll Costs within 8 week period (or 24 week)

  • Compensation Proof: List all employees on payroll along with documentation to verify eligible cash or non-cash compensation payments during the Covered Period or the Alternative Payroll Covered Period, including:
    • Bank account statements or third-party payroll service provider reports
    • Tax forms
    • Payment receipts, canceled checks or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans

Non-Payroll Costs within 8 week period (or 24 week)

  • Documentation verifying that the mortgage, rent or utilities services were in existence prior to February 15, 2020
  • Documentation of mortgage interest payments, rent payments and utilities paid during the 8 weeks (or 24 weeks) following the loan, including:
    • Business Mortgage Statements – Copy of lender amortization schedule and receipts or cancelled checks verifying payments
    • Business Rental or Lease Agreements – Copy of current lease agreement and receipts or cancelled checks verifying payments
    • Business Utility Bills – Copies of utility bill invoices and payment receipts
    • Copies of cancelled checks verifying payments
    • Bank account statements with ACH information

 

  • Evidence of restoration of pay by December 31, 2020 for any employee whose pay was reduced by 25% or more.
  • Evidence that employees remained on payroll or were rehired once loan was received, including a calculation of the average number of FTE employees on payroll during the Covered Period or Alternative Payroll Covered Period, and the “Reference Period” (one of the following should be selected by the borrower) the average monthly number of full-time equivalent employees for the period February 15, 2019 through June 30, 2019 or January 1, 2020 through February 29, 2020 (you, the borrower, are to select the time period) and the average monthly number of full-time equivalent employees for the period of (borrower to select one) for the eight weeks following the date of the loan.
  • Copy of all paperwork submitted to the bank.
  • Evidence of payroll costs, mortgage interest paid, lease payments and utilities paid before February 15, 2020. If self-employed, these expenses are allowed to the extent they are deductible on Form 1040 Schedule C.
  • Copy of Economic Disaster Injury Loan (EIDL) if refinanced with PPP loan. Be sure to determine how much was an advance that does not have to be repaid. If you used PPP to refinance an EIDL loan, only the funds used for payroll costs will be forgiven. Therefore, you should be prepared to provide documentation listed above for the EIDL loan.
  • Documentation that you were in business on February 15, 2020 and paid employees or independent contractors (Payroll Tax Filing for 1st quarter 2020)
  • For borrowers who are self-employed, the forgiveness amount for owner’s compensation is limited to eight weeks’ worth of 2019 net profit and does not include covered benefits. It also excludes any qualified sick leave equivalent amount for which a credit is claimed under section 7002 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116-127) or qualified family leave equivalent amount for which a tax credit is claimed under section 7004 of the FFCRA (similar rule as applies to employers with respect to pay for time for which a tax credit is claimed under FFCRA).

 

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Loan Forgiveness Sample Scenarios

Below are a few scenarios you might be facing as you begin the process of applying for your PPP loan forgiveness.  These scenarios are based on a $100,000 loan.

Scenario 1 – Fully Forgiven

Your PPP loan has been funded, and in the 8 week (or 24 week) period following your business spends $60,000 on payroll or payroll-related expenses, with $40,000 spent on mortgage interest, rent payments or utility bills. Your employees stayed fully employed and their compensation remained the same. Due to how you allocated your PPP funds towards eligible expenses, and that your employees were not affected, you are eligible for 100% loan forgiveness.

 

Scenario 2 – Full-Time Equivalent Employees Reduction

Your PPP loan has been funded, and in the 8 week (or 24 week) period following your business spends $60,000 on payroll or payroll-related expenses, with $40,000 spent on mortgage interest, rent payments or utility bills. This would make you eligible for 100% loan forgiveness. However, you also reduced your FTE employee headcount by 20% prior to February 15, 2020, and you do not plan to rehire before December 31, 2020.

Subsequently, your loan forgiveness amount may also be reduced by 20%, from $100,000 to $80,000.

 

Scenario 3 – Employee Compensation Reduction

Your PPP loan has been funded, and in the 8 week(or 24 week) period following your business spends $60,000 on payroll or payroll-related expenses, with $40,000 spent on mortgage interest, rent payments or utility bills. This would make you eligible for 100% loan forgiveness. However, the compensation of your employees earning below $100,000 (on an annualized basis in 2019) are now being paid 60% less what they were in a time period before your PPP loan was funded. You do not plan to increase their compensation to their prior level before December 31, 2020, the deadline to reinstate compensation to avoid reductions.

Subsequently, since you reduced salaries by 60%, which is 35% above the 25% threshold, your loan forgiveness may be reduced by 35%, to $65,000.

 

Scenario 4 – Reduction in Headcount & Compensation

Your PPP loan has been funded, and in the 8-week (or 24 week) period following your business spends $60,000 on payroll or payroll-related expenses, with $40,000 spent on mortgage interest, rent payments or utility bills. This would make you eligible for 100% loan forgiveness. However, you reduced your FTE employee headcount by 20% prior to February 15, 2020, without plans to rehire, which may reduce your forgiveness by 20%, down to $80,000. In addition, the compensation of your employees earning below $100,000 (on an annualized basis in 2019) are now being paid 60% less what they were in a time period before your PPP loan was funded. You do not plan to increase their compensation to their prior level before December 31, 2020, the deadline to reinstate compensation to avoid reductions.

Subsequently, your loan forgiveness may be reduced even further by another 60%, to $32,000.

 

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Loan Forgiveness FAQs

 

Are PPP loans eligible for forgiveness?

Yes, PPP loans are eligible for forgiveness. This means that you do not have a responsibility to repay the loan as long as during the 8 week (or 24 week) period since your received the funds they have been used for certain business expenses. There is a chance for you, as the borrower, that you may not receive forgiveness for the entire loan amount, but instead for a percentage of the amount. Click to learn more in our “Loan Forgiveness & Amount” section.

 

How do I apply for loan forgiveness?

Download and complete the Loan Forgiveness Application and contact your North Brookfield Savings Bank Business Lender to schedule a time together. You will need to provide documentation and verify information regarding full-time employees and compensation, in addition to documentation on qualifying mortgage-interest, rent and utility payments. You will be required to certify that the provided documentation is accurate and that the forgiveness amount was used for the outlined eligible purposes.

 

When can I submit my application and documentation for loan forgiveness?

You are eligible for loan forgiveness equal to the amount you expended during the 8 week (or 24 week) period, beginning on the date of the origination of the loan, which is when the PPP funds were received in your bank account.

 

What is my deadline for submitting documentation for the loan forgiveness?

There is not a fixed deadline for borrowers to apply for forgiveness. However, here are some key timelines to know:
• Borrowers have 10 months from the end of their applicable Covered Period or Alternative Payroll Covered Period to apply for forgiveness or they will need to begin repaying their loan with an interest rate of 1 percent.
• Loans issued on or after June 5, 2020, have a maturity date of 5 years. Interest accrues from the origination date.
• The Payroll Protection Program Flexibility Act (PPPFA) provides that loan recipients can defer repayment of principal and interest of their PPP loan until the time when the SBA compensates their lender for forgiven amounts of the loan.

 

How much forgiveness am I eligible for and what expenses qualify?

You are eligible for loan forgiveness equal to the amount you expended on eligible expenses during the 8 week (or 24 week) period, beginning on the date of the origination of the loan, which is when the PPP funds were received in your bank account.

  • Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Rent and utility payments
  • Interest on other debt obligations incurred before February 15, 2020

NOTE: Not more than 40% of the forgiven amount may be for non-payroll costs.

 

Is it true that some of my loan may be forgiven, but not all of it?

This depends. It is possible you will owe money if the funds from your loan were used to pay expenses besides payroll costs or payroll related expenses, along with mortgage interest, rent, utility payments, or interest on other debt obligations incurred before February 15, 2020. Also, the payroll costs must make up at least 60% of the forgiveness amount, with no more than 40% of the amount being used for non-payroll costs.

You could also owe money if you receive a reduction in forgiveness due to reducing your full –time employee headcount or reduce employee compensation by more than 25% for any employee that made less than $100,000, annualized in 2019.

Restoring compensation or rehiring employees by December 31, 2020 could help you to avoid the forgiveness reduction.

For a deeper dive visit our “Forgiveness Reduction” section.

 

What is the timeline for the lender’s decision on a loan forgiveness application?

No later than 60 days after receipt of a complete loan forgiveness application from you, the bank must issue a decision to SBA on a loan forgiveness application. That decision may take the form of an approval (in whole or in part); a denial; or, if directed by SBA, a denial without prejudice due to a pending SBA review of the loan. In the case of a denial without prejudice, you may subsequently request that the bank reconsider its application for loan forgiveness.

 

What will my bank review in my forgiveness application?

Along with your PPP Loan Forgiveness Application, you must provide the following information:

  • Certification contained in the Loan Forgiveness Application Form
  • Documentation of paid payroll and non-payroll costs
  • Documentation of paid non-payroll costs
  • Calculation of payroll and non-payroll costs

 

Will the SBA review individual PPP loan forgiveness applications?

Yes. Regardless of loan amount or size, the SBA has complete discretion regarding which PPP applications it will review, at any given time. PPP borrowers are required to maintain records for six years after the loan is forgiven or paid in full.

 

What if my loan is not forgiven?

If the SBA determines that you are ineligible for the PPP loan, the Bank will reject your loan forgiveness application. The SBA may also request repayment of the outstanding PPP loan balance or pursue other available remedies. Loan funds that are not forgiven must be repaid pursuant to your promissory note, and can only be spent on the following:

  • At least 60% of the loan proceeds must be used for payroll costs.
  • No more than 40% of loan proceeds may be spread across the following items only:
    • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
    • Mortgage interest payments (but not mortgage prepayments or principal payments);
    • Rent payments;
    • Utility payments;
    • Interest payments on any other debt obligations that were incurred before February 15, 2020; and/or
    • Refinancing an SBA Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020.

Please remember, if you knowingly use the funds for unauthorized purposes, you could be subject to additional liability such as charges for fraud.

 

Will there be an appeal process if my loan is denied for forgiveness?

Yes. If you have a negative determination for your loan forgiveness application, you may appeal the decision within 30 days. The SBA will require your bank to contact you in writing to request additional information or the SBA may request information from you directly.  The SBA will issue future guidance on the process in the future.

 

If my loan is not forgiven, what is the timeline for paying back the unforgiven part of the PPP loan, before it begins to accrue interest?

As soon as you receive the PPP loan you begin to accrue interest, however your payments are deferred for the first 6 months. Following the 6 months of deferral, you will have 18 months to repay the loan with a 5-year term, 1% interest loan.

 

Are advance payments of interest on mortgage obligations eligible for loan forgiveness?

No, they are not.

 

What is the Covered Period and Alternative Payroll Covered Period?

Covered Period: The eight week (56-day) period that begins the same day as the initial PPP loan disbursement was made.

Alternative Payroll Covered Period: Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the eight-week (56-day) period that begins on the first day of their first pay period following their PPP Loan Disbursement Date (the “Alternative Payroll Covered Period).

 

What is included for payroll costs?

  • Salaries, wages, or comparable compensations. This includes overtime and normal commissions already structured as part of typical compensation;
  • Payment of cash tips or equivalent;
  • Payment for vacation, parental, family, medical, or sick leave;
  • Allowance for dismissal or separation;
  • Payment of state or local tax assessed on the compensation of the employee;
  • Payment for benefits including group health care and retirement benefits, 401K matches previously in your standard benefits package, disability or life insurance contributions, and payments to a Union to provide direct benefits to your employees, particularly medical;
  • Payments for Self Employed Individuals, Independent Contractors or Sole Proprietors would include a net income not more than $100,000 in one year.

 

What does “full-time equivalent or FTE” mean?

Full-time equivalent employee means an employee who works 40 hours or more, on average, each week.

 

How do I calculate my full-time equivalents?

You can calculate your full-time equivalents or FTEs by reading this helpful explanation. Calculate your FTEs.

 

If I reduce my number of full-time equivalent (FTE) employees, what effect does that have on my loan forgiveness amount?

To start, you, the borrower, must select a reference period you will be using:

  • February 15, 2019 through June 30, 2019;
  • January 1, 2020 through February 29, 2020;
  • in the case of a seasonal employer, either of the two preceding methods or a consecutive 12-week period between May 1, 2019 and September 15, 2019.

If the average number of FTE employees during the covered period or the alternative payroll covered period is less than during the reference period, the total eligible expenses available for forgiveness is reduced proportionally by the percentage reduction in FTE employees.

For example, if a borrower had 10 FTE employees during the reference period and reduced  to 8 FTE employees during the covered period, the percentage of FTE employees declined by 20% and thus only 80% of otherwise eligible expenses are available for forgiveness.

 

Will a borrower’s loan forgiveness amount be reduced if the borrower laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer?

No. This should not reduce your loan forgiveness amount.

 

What if I have to lay off people again after December 31, 2020 because business has not fully returned?

There currently is no requirement or guidance stating that the headcount needs to be retained beyond the December 31, 2020 date.

 

What if I offer employees their positions back but decline because they are currently making more on unemployment?

This may be a struggle you are facing since the additional $600/week unemployment allows some of your employees to potentially receive more income by staying unemployed. It is beneficial to you to remind your employees that the $600 extra UI benefit ends in July, that you may hire someone else if they cannot return, and that you cannot promise their position will remain in July. It is also important to share the safety measures you have implemented at your workplace to make it safer for them to resume work and allow them to ask questions.

The SBA has clearly stated, if that you offer to rehire an employee and the employee refuses or declines to resume work for a non COVID-related reason, it should be properly documented by the borrower, and then this employee will be included in the headcount as though they were employed. This will not negatively impact your PPP loan forgiveness calculation as long their hours are covered with either a new employee or an existing one.

Document, document, document. It is important that you document this rehire offer to employees in the form of a hard copy certified letter, with an included option for them to check “Yes” or “No” to your offer. It is also beneficial that in this communication you include the safety measures you are taking to protect said employee. It is suggested that multiple attempts be made and documented to offer them their position back. Once those attempts have failed, or if you do not hear back, you can accept their decline for re-hire.

 

When rehiring employees back, is there any sort of protocol I should follow?

Yes. We have a few suggestions of what you could include when you offering to rehire an employee.

Send a certified rehire letter and include:

  • The details of the rehire offer
  • The question “Do you accept this position” with “Yes” or “No” check boxes
  • Your safety policy for returning to work
  • Your safety measures you are implementing for a safe working environment
  • Signature and date line

Create a quick rehire checklist, with signature line, documenting any paperwork that is being reissued (handbooks, job descriptions, policies, confidentiality agreement, W-9, etc.) and include a statement such as “The listed items above were provided to me upon hire. Items checked off above have been provided to me and I have been given the opportunity to ask questions.”

 

What is the best way to submit or provide all of this information to my lender?

We recommend you speak directly with your Business Lender to see which method for transmitting and reporting documentation, along with what specific documentation types they request, so you can use a method that will work best for you and your lender.

 

Do you have any suggestions on how to track the use of our PPP funds in real time?

First and foremost, we recommend opening a new and separate business deposit account specifically for your PPP funds so they are not co-mingled with other funds, simplifying the tracking. With some of the calculation requiring more detailed tracking, it may be best to set up a spreadsheet that will work for your specific situation.

However, if you use an accounting firm we would suggest contacting them to see if they have a solution for you.

 

How do we know if we really “need” PPP funds, according to the SBA?

Some smaller business are feeling concerns over how to show that they needed the PPP funds, especially if they still had funds in their bank accounts. Although the current mandatory audit threshold is for PPP loan amounts of $2 million or more, it is widely recommended that smaller businesses below this $2 million threshold gather evidence of their need of the PPP funds, including if:

  • You were forced to shut down by a mandated public health order;
  • You had to lay off employees because they were not able to perform their job functions while working remotely;
  • Your sales were off by a large percentage compared to the same period last year;
  • Orders were subsequently cancelled;

 

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