The Treasury announced another significant update: if you pick the 24-week period, you may submit your forgiveness application as soon as you spend the funds. Read Alan Gassman’s article on Forbes.com
If you have been focused on re-opening the tasting room and missed some of the recent PPP updates, here is a summary:
- May 15th, The Treasury issued The PPP Forgiveness Application (click here to download).
- June 3rd the Senate passed what is known as the Flexibility Rule which added the option to extend your loan to 24 weeks and to lower the requirement of payroll expenses to 60%.
- June 12th, the latest of 7 Treasury clarifications or rule changes called IFR. This one is titled “Interim Final Rule on Additional Revisions to First Interim Final Rule,” I kid you not. Don’t bother to read this… It’s just an example of what I have to read to stay on top of this.
Changes have come out faster than I can summarize them. Fortunately, I found a great resource on Forbes.com. Alan Gassman and his team of CPAs and Attorneys have been able to write articles within days of each major update and they give free webinars. Their information is written for the layman and other masochists who have been following the PPP Loan Program.
If you happen to be new to this, then you have a lot of catching up to do. If you have not applied yet, the deadline to apply is June 30th. Do not procrastinate.
Here is my summary of some key details:
- If you are close to full forgiveness with the original 8-week covered period, then submit it now and get back to your life.
- Alan says: “When in doubt, pay it out.” There are several loopholes and law changes. The payment must clear the bank before the end of your covered period. If you are using Bill.com or a bill payment service, the date of your payment to the service will suffice.
- There are several loopholes:
- If you have an FTE reduction or a payroll reduction, you can use non-payroll expenses to eliminate those reductions. This is because of some some weird math on the Forgiveness Application. The best way to use this loophole is to pre-pay your rent. You have to pay it anyway, so again, When in Doubt, Pay it Out.
- If you laid off some tasting room staff before your covered period and never brought them back, any payroll reduction for those employees is ignored because you don’t even list them on the worksheet. This is an example of how the Forgiveness Application does not follow the spirit of the program, but the instructions are clear.
- There are many new exemptions to the FTE calculation that allow you to add back most of your crew. Since you were required to close your tasting rooms by law, this exemption applies to those employees. You all should have 100% FTE Reduction Quotient (which means no FTE reduction).
If you have more than a few employees, I recommend that you purchase the excel workbook that this team created for $179. They have videos to walk you through it, they update it when there are changes in the law, and they give you a money back guarantee. Go Here to Purchase. Trust me, this will save you a lot of heartache.