So, you’ve applied for and been approved for a Payroll Protection Program loan. Now what?

The next 8 weeks are crucial to maximize your eligible loan forgiveness.  This is the time to map out your strategy!

A few things to note and some things that still need to be clarified:

For any amount of your PPP loan to be eligible for forgiveness:

• At least 75% of the loan proceeds must be used for payroll;
• In general, 25% of the loan proceeds can be used for mortgage interest, rent and utilities;
• If you also received an EIDL grant, you may have to reduce the amount forgiven by the proceeds of the grant;

However, some potential hurdles to keep in mind:

• The amount of loan forgiven will be reduced if:
  • Total employee head count is reduced;
  • Salaries and wages of employees earning less than $100,000 annually is reduced.
• If you do have a reduction in salaries or headcount, your loan forgiveness will not be reduced if you restore these items by June 30, 2020.

There are still a lot of details that need further clarification, and the SBA has until April 27 to provide additional guidance and interpretation. It’s going to be critical to follow the guidelines exactly in order to minimize reductions in loan forgiveness. We’ll keep you updated with any new developments.

Polk and Associates is here to help you develop a PPP loan forgiveness strategy that will maximize your loan forgiveness as well as navigate through the calculations and documentation necessary to apply for loan forgiveness.

Please contact us if you would like assistance in planning for what may be one of your largest transactions of the year!

Polk & Associates

Large enough to serve a diverse clientele, yet small enough to maintain a hands-on approach, we are committed to maintaining the highest accounting and ethical standards with continuous education, extensive research resources, and excellent quality control.

Polk and Associates is a member of the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants. The firm participates in the AICPA Peer Review Program, and has always received the highest level of award for its audit practice and quality control.