Your PPP Loan...Maximizing Your PPP Loan Debt Forgiveness • Recap from Part 1 • New guidance •...

Your PPP Loan How to Maximize Debt Forgiveness

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May 8, 2020Part 2 of 4

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The vcfo Team

vcfo.com © 2020 vcfo | Confidential and Proprietary

DARRELL TESMERCCO

REGINA WALTERSConsulting CFO

JENNIFER LENNARZConsulting CFO

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• Platform used to ask questions

• #62047


Maximizing Your PPP Loan Debt Forgiveness

• Recap from Part 1

• New guidance

• Maximizing forgiveness

• Documentation and reconciliation

• Additional considerations

• Questions



Recap from Part 1

• Starting date

• Open a separate bank account

• What to use proceeds for

• What not to use proceeds for

• Non-payroll costs limit for forgiveness

• Work with your lender

• Monitor SBA and Treasury websites


New Published Guidance from SBA & US Treasury

• SBA - Additional Criteria for Seasonal Employers

• Use of any consecutive 12-week period between

May 1, 2019 and September 15, 2019

• SBA - Promissory Notes, Authorizations, Affiliation and Eligibility

• US Treasury - New FAQ’s 32 through 44

• SBA will review all loans over $2 million, in addition to others

• A PPP loan will not be reduced if an employee declines an offer of

rehire, but documentation will be required


Forecast & Strategies• Loan forgiveness calculations remain uncertain

• Forecast expenses for the 8-week (56 days) covered period for loan forgiveness

• Qualified for forgiveness

• Not qualified for forgiveness

• Prepare for two time periods

• Lender’s documents may reference a different effective date than the date the

first disbursement was received

• You may need more than one forecast

• Share your forecast with your lender

• Develop strategy for the weeks and months following the end of your 8-week period


Documentation & Reconciliation• Document necessity if you have not already

• “Current economic uncertainty makes this loan request necessary to support the ongoing

operations of the Applicant.”

• Include all records from day one of your effective period

• Create a list of vendors with invoice dates and due dates

• Known allowable

• Unknown if they are allowable or not

• Save relevant documents in a “PPP” folder

• Payroll tax filings

• Payroll summary reports

• Invoice copies and proof of payment

• Create a saving methodology for the documents


Documentation & Reconciliation• Track allowable expenses and payments over the 8-week period including a running total

• Create reconciliations for items that have both allowable and non-allowable expenses

• Payroll costs – not all expenses associated with payroll are allowable

• Annualized salary in excess of $100,000

• Federal employer payroll taxes (FICA, FUTA)

• Payroll processing fees

• FTE tracking – including changes and wages

• Ratable reduction in forgiveness for a reduction in headcount

• Pay reductions >25% reduces forgiveness

• June 30, 2020 deadline to restore headcount and wages

• Arrange a meeting with your lender to discuss documentation, processes, and methodology


Additional Considerations:

• Continued communication with your lender about documents required for

loan forgiveness

• Monitor SBA and US Treasury Publications daily for interim rulings and

additional guidance

• Work with your payroll provider

• Work with vendors

• Expenses paid with amounts forgiven are not eligible for tax deductions

• Prioritize PPP loan forgiveness forecasting, documentation and

reconciliation with your finance, accounting, and HR staff


Additional Considerations:

“The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility

payments, as specified under the Paycheck Protection Program Rule; I understand that if the funds are knowingly used for unauthorized

purposes, the federal government may hold me legally liable, such as for charges of fraud.”

Questions?

Information presented is subject to further change as additional guidance may be released by the SBA, the US Treasury Department, the Internal Revenue Service or other governmental authorities. Informationpresented does not include all scenarios or situations that may apply. Information included in this presentation does not represent legal advice. vcfo recommends further discussion with legal counselregarding legal questions related to the information presented. Confidential information of vcfo Holdings, Inc. and its subsidiaries. No use, reproduction or disclosure is allowed without the written approval ofvcfo Holdings, Inc. Copyright © 2020 vcfo Holdings, Inc. All rights reserved. vcfo and certain other marks are the trademarks and registered trademarks of vcfo Holdings, Inc. in the United States and othercountries. Certain other marks, if referred to, are the trademarks of their respective companies.

Thank you!

Your PPP Loan...Maximizing Your PPP Loan Debt Forgiveness • Recap from Part 1 • New guidance •...

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