Hey all!

One of the largest pieces of the most recent piece of legislation passed is the "restart" of the Payroll Protection Program.  Click here for some of the details we know as of the SBA guidance issued late Wednesday (1/6/21).

Keep in mind that this information is just being published by the SBA within the last 24 hours.  Lenders will need time to establish portals and build processes for round two applications.  

At this point, if you are interested in having HD Davis CPAs determine if you will be eligible and/or apply for your loan for you, we are asking that you send us an email requesting to be put on our list and we will have someone reach out to you to collect the necessary information to be ready when your lender is live.  

Here are some changes to consider:

1. Eligible expenses for both rounds now include operations expenditures, property damage costs, supplier costs, and covered worker protection expenditures.
2. Expenses used for forgiveness are tax deductible.
3. Businesses that received a PPP loan can now take the Employee Retention Tax Credit, but the credit is not available for the wages paid with the proceeds of the forgiven portion of the PPP loan.
4. PPP forgiveness will NOT be reduced by the Economic Injury Disaster Grant.

There are some new items for round two:

1. Companies that have less than 300 employees and have experienced a decrease in sales of 25% in any quarter of 2020 (compared to the same quarter in 2019) will qualify to reapply for a second forgivable PPP loan.
2. Companies applying for loans less than $150,000 will not have to prove revenue decrease at application. Companies applying for loans above $150,000 will need to be prepared to prove revenue decreases with your application.
3. Employee counts will be done by physical location.  For example, for a restaurant chain with multiple locations, each physical location will be subject to a 300 person employee count. For the loan calculation, most businesses will use the same calculation as round one, which is monthly payroll costs x 2.5.  Businesses with NAICS Code starting with 72 (restaurants, hospitality, etc.) are able to use a multiplier of 3.5 instead of 2.5.
4. Monthly payroll cost used for calculating the loan amount can be calendar year 2019 or the twelve preceding months to your loan application.
5. The maximum loan amount is $2 million as opposed to $10 million.  The maximum loan amount for affiliated corporate groups is $4 million.

These are just some of the key points of the new stimulus package.  We are teaming up once again with The Business Journal for a webinar on Wednesday, January 13, at 11:00 a.m. to provide more details.  Please register here!

Thank you again for your continued support.

Tim