While businesses struggle to maintain or bring back their workforce during these unprecedented times, the ambitious Paycheck Protection Program (PPP) continues to forge forward. The speed at which this massive program was rolled out brings with it a fair amount of challenges, areas of uncertainty and open questions for business owners.
Our team at Newburg has been working around the clock to stay ahead of the ever-changing SBA landscape helping our clients navigate the PPP program tailored to their own particular situation. There is no “one size fits all” within the PPP program. Each business faces its own challenges as state orders and essential/non-essential businesses look to get back to full operations in the coming weeks/months. We have developed and refined various approaches and considerations for clients as they assess anticipated levels of forgiveness and/or use of the very favorable low interest rate loan program.
How can the Newburg team assist through the tracking and submission process?
We have a full-time dedicated team that can help you navigate the various options and considerations between the PPP, EIDL, and other stimulus provision opportunities. From a consulting perspective, we can help you develop a plan for tracking your eight-week spend and maximize forgiveness. We have developed internal spreadsheets that calculate the multiple levels of potential forgiveness reduction to ensure accuracy and help you plan your cash flow.
As part of the SBA PPP, post the eight week spend, borrowers will be required to submit to their lenders, documentation supporting the loan forgiveness calculations, attesting to the accuracy of reporting and use of the funds.
- What if my calculations are incorrect?
- What if I factored in the incorrect permitted costs?
- What if I misinterpreted application of my FTEs ?
- What if the support I provide is not adequate?
- What is my potential liability exposure?
These are just some of the questions that shareholders, partners, and directors should be thinking about prior to submitting their request. While the importance of tracking the use of the SBA PPP funds cannot be understated, the reality is that many companies have limited accounting resources or modified internal controls as a result of the pandemic which could lead to missed opportunities for forgiveness, errors, or unauthorized use of program funds. If you have been asking yourself these questions or simply need an independent verification, we can help in a variety of ways.
The AICPA has an attestation engagement known as an Agreed Upon Procedures Engagement which allow CPA’s to engage with clients and third parties to perform specific procedures on a subject matter and report the findings without providing an opinion or conclusion.
Under the terms of an agreed upon procedures engagement, a CPA performs certain procedures which are agreed to by the parties involved and formally report the findings from the results of the procedures. These reports often provide the users with information regarding the availability of data, the types of supporting documentation and the accuracy of information presented. How better to answer your questions and address your concerns than with the verification of an independent CPA?
We have developed a tailored agreed upon procedures engagement designed to test the accuracy of the SBA PPP Loan Forgiveness Request and provide you with that piece of mind.
As a business owner what are the other key takeaways to date regarding the PPP?
- This is a two-year loan at a 1% interest rate that contains a very favorable forgiveness provision built-in
- The forgiveness program drives off of getting your workforce back ASAP to pre-pandemic headcounts, requiring that owners weigh goodwill with the utilization and cost of their workforce.
- Forgiveness is calculated only on the eight-week spend from the date you receive funds. Note that you do not have to spend the entire loan to qualify for forgiveness.
- Many owners need assistance with developing a plan for your ‘eight-week spend’ and targeting 75%+ for “payroll costs”.
- Reviewing the pre-pandemic full-time equivalent (FTE) landscape with your projected plans at the end of the eight-weeks and by June 30th 2020 are essential to forgiveness planning.
- Develop a plan to maximize forgiveness and get the best use of any remaining termed out loan over 2 years.
- Ensure tight controls over tracking and back-up support. As mentioned, post June 30, 2020, your bank will require a complete package with your forgiveness calculation and detailed support or as required.
- We still await final regulations from the SBA for forgiveness calculation clarity. Questions such as “incurred” vs. “paid”, mechanics of the June 30th “cure-all” and specific FTE calculations to name a few still remain open ended.
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Please do not hesitate to reach out to our team at firstname.lastname@example.org should you have any questions.