On March 31, 2020, The Department of Treasury released the “Paycheck Protection Program” loan application form and provided some additional guidance. However, The Small Business Administration (SBA) still has not released regulations that will cover these loans. It is anticipated that those regulations will be released by April 3, 2020. Treasury says the applications for small businesses and sole proprietorships will be accepted starting April 3, 2020.
You can link to the application here on our website. This is for illustration purposes only as the actual loan application is made through your bank. We suggest that you contact your bank to make sure they will be offering this loan and to provide you with specific information as it becomes available.
The Paycheck Protection Program (PPP) application form is straightforward and appears to only require documentation in the form of payroll tax returns and detailed payroll tax reports for various periods that include regular pay and other forms of pay like vacation or sick pay and the like.
While we DO NOT know exactly what the banks will do with these applications or exactly what they will consider for the maximum loan, there are some things you can do now to get ready to apply:
– Suggest contacting your payroll company to see if they will support running the various detailed reports required for various periods.
– You will most likely need to supply the following payroll information.
- Month-end payroll reports by employee from January 1, 2019 though the most current month in 2020 that shows pay by type (regular pay, sick pay, etc.). Most likely that calendar 2019 payroll will be used for the average monthly payroll though.
- Payroll reports for each pay date by employee for February 2019 and February 2020
- Forms 941 all quarters for 2019
- Form 940 for 2019
- Quarterly state unemployment tax returns for 2019
Documentation will be needed to support additional payroll costs, by employee, for company paid healthcare benefits including health insurance premiums (health, dental and vision) as well as company paid amounts of an HRA or HSA.
– Suggest reviewing Company health insurance premium invoices from January 1, 2019 through most current month summarizing by employee as needed. Company will need to document Company paid costs (net of employee contribution) for health insurance related items by employee.
Documentation will also be needed to support company paid retirement funding by employee for the applicable period.
– Suggest reviewing employee data for 2019 and year to date 2020, to determine the Company match or Company contribution by employee.
The application form itself also contains several representations and authorizations that must be made by the borrower. This includes authorization to allow SBA to request criminal record information about the borrowers from criminal justice agencies to determine eligibility for programs authorized by the SBA.
While there are still unknowns with this program, we wanted to give our clients updated information as it becomes available. If you have any questions, please contact your Maillie LLP representative via phone or email.