Tuesday, May 5, 2020
By Sue Peirce, CPA | COVID-19 Response Team
Our forgiveness calculator is updated to reflect recent SBA and IRS announcements, as well as your feedback. The summary page now shows the tax impact of having the forgiven expenses be non-deductible. While comments have been made by congressional members that this was not the intent of Congress, we want you to see the reduction in cash flow if no action is taken. Please note the documentation tab.
Also, review the paperwork executed when the promissory note was signed. Many banks included an “Agreement to Provide Additional Documentation Post Closing” that specifically lists the bank’s requirements. Finally, in our May 4th Summary of SBA Additional FAQs issued May 3, 2020, SBA states it will review all loans in excess of $2 million, in addition to other loans as appropriate. Not only should the required documentation be maintained contemporaneously. but you need to take immediate action to formally document your determination that current economic uncertainty makes your loan request necessary to support your ongoing operations. See Recent SBA FAQs Raise Questions on PPP Eligibility dated April 30th and Documenting Current Economic Uncertainty Making Your PPP Loan Request Necessary to Support Ongoing Operations dated May 5, 2020.
Updated PPP Estimated Loan Forgiveness Calculator
Summary of Documentation and Rules
Summary of SBA Additional FAQs issued May 3, 2020
Recent SBA FAQs Raise Questions on PPP Eligibility
Documenting Current Economic Uncertainty – Making Your PPP Loan Request Necessary to Support Ongoing Operations (Page 3)
Our COVID-19 Response Team has been assisting clients by developing cash management models. Our Webinar Part 7 discussed cash management techniques and is available for download on our website. We have also developed an extension of our Healthy Growth Checkup® specifically for the various stimulus provisions of the CARES Act and related legislation, plus best practices around cash management and navigating in times of financial crisis. If you feel assistance may be needed, please contact Brandon Fredericks or Matt Silla, who are leading the cash management segment of our COVID-19 Response Team, or your engagement principal.
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