Newsletter from

Steve Richardson & Company

Certified Public Accountants

March 31, 2020

The 5th COVID-19 Newsletter

To Our Clients and Friends:

We asked a local bank for clarification on how a business applies for the Payment Protection Program (PPP) Loan. They have been very helpful but the message the bank is sending is that this is a new and “evolving” program. I do know that the bank is “selling” these loans hard because they make money processing these SBA loans with zero risk to the bank.

Following is what the bank told us
The final qualifying guidelines and application process for the Small Business Administration’s Payment Protection Program (PPP) Loan have not been published. We are asking interested parties to begin the process of gathering information that might be necessary for submitting a request. NO GUARANTY, NO COLLATERAL.

Along with the list of financial and business-related information below, an SBA Borrower Information Form is attached. While we expect the application for the PPP loan to be streamlined. Please take some time to review the information the SBA has historically required for their guarantee loans.

SBA needs the following information to determine if your business qualifies for the PPP loan and to calculate your maximum loan amount:

1. SBA Borrower Information Form (See Attached):
2. Financial Information
   1. Most Recent Business Tax Return (2018 or 2019), or YTD 2019 P&L and Balance Sheet if taxes not done.
   2. YTD Profit & Loss and Balance Sheet dated 02-15-2020

3. Business Ownership/Authorization Documents (Articles of Incorporation, Licenses, etc.)
4. Brief description of how COVID-19 has impacted your business
5. Payroll and Employee Related Expenses:
   1. Payroll reports by month (in total and by employee) for 2019, indicating which employees are full-time and which are part-time
   2. Payroll reports by pay period (in total and by employee) for January-March of 2020, indicating which employees are full-time and which are part-time.
   3. Compensation to any one employee in excess of $100,000 for the prior 12 months
   4. Copies of quarterly 941 reports and state unemployment reports for all of 2019 and Q1 2020
   5. Copy of 2019 940 report
   6. 2019 W-2s for all employees
   7. Payments for group health insurance premiums, from April 1, 2019 to March 31, 2020
   8. Payments to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation from April 1, 2019 to March 31, 2020
   9. 1099s for 2019 for independent contractors that would otherwise be an employee of your business. Do NOT include 1099s for services.
   10. Document the sum of all retirement plan funding that was paid by the Company Owner (do not include funding that came from the employees out of their paycheck deferrals).
       1. Include all employees, including company owners.
       2. 401K plans, Simple IRA, SEP IRAs.

Steve’s Note: The point of this SBA program is employment retention. Detailed payroll data will be required by employee, by pay period, by month, by quarter and by year. This data will need to reconcile with the payroll tax returns as filed. If they do not reconcile, payroll tax reports will need to be amended. I know how to do this stuff, but, frankly, Liz knows how to do it much better that I do. I might pass this task over to Liz.

Sincerely,

Steve Richardson, CPA