QUESTION: Lots of questions around furloughed employees (including physicians) and if you still qualify for the PPP loan/forgiveness.
Answer: You will be asked to show your payroll expenses for employees for the last year (1 year back from the time you apply). You have until June 30th to rehire any furloughed employees (or hire new ones). When calculating the average monthly payroll for the past year, salaries will be capped at $100K. So for any employee making over $100K (including physicians), calculate their salary for 2019 as if they were only making $100k.

QUESTION: How is the forgiveness amount calculated?
Answer: Forgiveness on a covered loan is equal to the sum of the following payroll costs incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):
• Payroll costs plus any payment of interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligation plus and any covered utility payment.
You must apply through your lender for forgiveness on your loan. In this application, you must include:
• Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings.
• Documentation verifying payments on covered mortgage obligations, lease obligations, and utilities.
• Certification from a representative of your business or organization that is authorized to certify that the documentation provided is true and that the amount that is being forgiven was used in accordance with the program’s guidelines for use.

QUESTION: Where to apply?
Answer: Apply at your local bank, where you have a good relationship, however it is encouraged that you apply with a bank that has experience with Small Business Association (SBA) loans. You do NOT apply for PPP loans through the SBA itself. Our speakers from Pinnacle Bank and Quantum National Bank will be happy to assistance if your local bank is not comfortable with SBA loans.
All banks offer the same interest rate for these loans. It is set at a 4% max by the SBA. Interest only applies to any amount not forgiven.

QUESTION: If I get an EIDL and/or an Emergency Economic Injury Grant, can I get a PPP loan?
Answer: Whether you’ve already received an EIDL unrelated to COVID-19 or you receive a COVID19 related EIDL and/or Emergency Grant between January 31, 2020 and June 30, 2020, you may also apply for a PPP loan. If you ultimately receive a PPP loan or refinance an EIDL into a PPP loan, any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the PPP. However, you cannot use your EIDL for the same purpose as your PPP loan. For example, if you use your EIDL to cover payroll for certain workers in April, you cannot use PPP for payroll for those same workers in April, although you could use it for payroll in March or for different workers in April.
You CAN (and should) however apply for both the PPP loan and the Accelerated/Advance Medicare payments.

QUESTION: How much money can I get?
Answer: The maximum amount any small business may borrow is 250 percent of its average monthly payroll expenses incurred during the 1-year period before the date on which the loan is made, up to a total of $10 million. This amount is intended to cover eight weeks of payroll expenses and any additional amounts needed to make payments towards debt and certain other identified obligations.
Business owners can choose any eight-week period between February 15th, 2020 and June 30th, 2020 for the use of the loan proceeds.

QUESTION: What costs are eligible for payroll?
Answer:
• Compensation (salary, wage, commission, or similar compensation, payment of cash tip or equivalent)
• Payment for vacation, parental, family, medical, or sick leave
• Allowance for dismissal or separation
• Payment required for the provisions of group health care benefits, including insurance premiums
• Payment of any retirement benefit
• Payment of State or local tax assessed on the compensation of employees

QUESTION: What are allowable uses of loan proceeds?
Answer:
• Payroll costs (as noted above)
• Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
• Employee salaries, commissions, or similar compensations (see exclusions above)
• Payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation)
• Rent (including rent under a lease agreement)
• Utilities
• Interest on any other debt obligations that were incurred before the covered period

QUESTION: Will this money be taxed as income for 2020?
Answer: No, you will not receive a 1099 or be taxed on this PPP money.

QUESTION: What documents do I need to have ready for the application?
Answer: (Forwarded from another banker friend):
Preliminary Checklist for Paycheck Protection Program (PPP Loan)
• 2019 Business Tax Returns or Year End Financial Statements as of 12/31/19
• 2019 Payroll Cost and YTD Payroll Cost through February 15, 2020
• # of employees as of December 31,2019
• # of employees as of February 15, 2020
• What industry does the business fall under?
Payroll Expense verification documents to include:
• IRS Form 940 Employers Annual Federal Unemployment Tax Return (FUTA)
• IRS Form 941 Employer’s QUARTERLY Federal Tax Return
• Payroll Summary Report 2019 with corresponding bank statements
• W2 Summary
• 1099 Summary
• Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.
• Copy of 2019 1099s (if Independent Contractor)
• Copy of 2019 W2s for wage earners