November 10, 2020

Flexible, Secure and Cost-Effective Strategies to Build into Your 2021 IT Budget

Year-end budgeting is going to look a lot different this year in the midst of a global pandemic. Business objectives have undoubtedly changed over the past year and innovation is more important than ever to address these changes and recover from the effects of COVID-19. Making the case for flexible, secure and cost-effective technology platforms will be vital going into 2021.

Flexibility

Remote work was forced upon many companies this year, and if virtual work options were not already part of the company’s technology strategy, it caused a lot of time, money and frustration to implement quickly. Being flexible became the name of the game, and the need to be agile is here to stay. In the coming year, businesses will want to build their technology strategy with a focus on flexibility, so as business goals or environmental factors evolve, they can easily adjust using technology. Going into 2021, three flexible strategies to consider are:

Along with having a flexible IT strategy, keeping it secure should also be top-of-mind.

Security

Continuing to maintain and build a robust cybersecurity strategy is another vital focus going into 2021. Cybercriminals are getting more and more sophisticated, and breaches are getting larger and more costly. Now is the time to review your cybersecurity architecture and develop a road map going into the new year that includes:

  • Governance, Risk and Compliance Measures
  • Vulnerability Management
  • Information Protection and Privacy
  • Cybersecurity Training and Testing

Even with the best cybersecurity safeguards in place including backups, firewalls and software patches, it takes one click by an unknowing employee to cost your business a lot of time, money and important data. Employee cybersecurity training can equip everyone in the company with the tools and knowledge needed to do their part in avoiding a data breach.

Flexibility and security are important pieces of every technology strategy for 2021 but coming out of a pandemic, companies also need to be mindful of budgets.

Cost-Effectiveness

With cost-cutting being a reality amidst a global pandemic, business owners and CIOs need to decide which parts of their IT strategy need to be done in-house, and where they can find cost efficiencies by outsourcing.

Anders Technology specializes in bridging the gap in technology needs, from co-managing alongside internal IT staff to supplement expertise, to being the entire IT team, we can step in as much or as little as needed. Below is an example of ways we partner with our clients.

Bridging the Gap in Your Technology Needs | Anders Technology

Anders Technology can help be flexible by taking on more when needed and pivoting the strategy with supplemental resources. With a team of advisors with in-depth knowledge in several areas, we can help you develop a technology strategy that helps you meet business goals while staying secure and cost-conscious. Learn more about Anders Technology or contact an Anders advisor below to get started.

All Insights

October 7, 2020

Selling Your Business? SBA Clarifies Change of Ownership Rules for PPP Loan Borrowers

Many businesses have received and benefitted from Paycheck Protection Program (PPP) loan funding during the pandemic, but the rules on loan forgiveness have continued to evolve. On October 2, the SBA published a Procedural Notice regarding “change of ownership” in the event that a PPP loan is still outstanding at the time of the sale of a business. It was obvious from the loan documentation that was originally signed, that the sale of a business would be problematic while the loan was still outstanding. Borrowers and advisors have been anxiously awaiting clarification. Highlighted below are the primary areas that were defined.

How does the SBA define “change of ownership”?

The SBA defines a change of ownership in a business when one of the following occurs:

  1. At least 20% of the common stock or other ownership interest of a PPP borrower, including a publicly traded entity, is sold or otherwise transferred, whether in one or more transactions, including to an affiliate or an existing owner of the entity                                                                     
  2. The PPP borrower sells or otherwise transfers at least 50% of its assets, measured by fair market value, whether in one or more transactions
  3. The PPP borrower is merged with or into another entity

When is SBA approval required?

SBA approval is required on all sale transactions, with the exception of any of the following situations where only lender approval is necessary:

  1. The PPP loan is fully satisfied, which means the loan is either:
  2. Paid in full; or 
  3. Forgiven by the SBA (i.e., the SBA has remitted payment to the lender) and any unforgiven amounts are paid in full.
  • In a stock sale or merger:
  • A sale or transfer of less than 50% of the borrower’s common stock or other ownership; or
  • The PPP borrower completes a loan forgiveness application reflecting its use of all loan proceeds and submits it to the lender and puts in an interest-bearing escrow account controlled by the PPP lender funds equal to the outstanding balance of the PPP loan.
  • In an asset sale of 50% or more of the borrower’s assets, if the PPP borrower completes a loan forgiveness application reflecting its use of all loan proceeds and submits it to the lender and puts in an interest-bearing escrow account controlled by the PPP lender funds equal to the outstanding balance of the PPP loan.

What is the borrower required to do prior to the sale?

Prior to the closing of any change of ownership transaction, the PPP borrower must notify the lender in writing of the transaction and provide the lender with a copy of the relevant transaction documents necessary to effectuate the proposed transaction. The lender is required to submit certain documentation regarding the transaction to the SBA within five business days of the completion of the transaction.

Despite the occurrence of a change of ownership, the PPP borrower remains responsible for:

  1. Continued performance of all obligations under the PPP loan;
  2. Certifications made under the PPP loan application, including the certification of economic necessity; and
  3. Continued compliance with all other PPP loan requirements.

The PPP borrower continues to be responsible for obtaining, preparing, and retaining all required forms and documentation and providing these forms and documents to the PPP lender, servicer, or SBA upon request.

The new owners are liable for any unauthorized uses of PPP loan proceeds by the new owner.  If the new owner also had a PPP loan, the PPP loan funds must be segregated and properly allocated among the two borrowers.

Where do we go from here?

Although many questions were answered in this most recent guidance, there is much still that remains unanswered, including:

  • How can I speed up the process if pending M&A activity is imminent?
  • What happens if the bank allowed a sale to already happen prior to the new guidance?
  • What recourse do I have if my bank isn’t accepting applications yet?
  • Who is responsible if SBA reviews a loan years later and nullifies some or all of the forgiveness?

Read the full SBA Procedural Notice.

Open and upfront communication with your bank and/or advisors is critical prior to any transaction. Legislation is continuing to evolve and it’s important to keep up with the latest rules and regulations to make sure you’re making decisions based on accurate data. Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

All Insights

September 16, 2020

PPP Loan FAQ: Forgiveness Timing and Year-End Tax Planning

With the end of the year looming closer, many businesses are focused on ensuring they receive forgiveness for their Paycheck Protection Program (PPP) loan. Business owners are wondering if and when they should apply for loan forgiveness, and what changes are coming from Congress, the SBA and banks. Below we answer common questions around PPP loan forgiveness timing, year-end tax planning and talks of another stimulus package.

PPP Loan Forgiveness Timing

Q: Should I submit my application now? Why or why not?

A: Anders is advising clients to wait until further guidance is released by the SBA and IRS. We do not see any benefits to applying early, and we see more changes as Congress gets closer to passing another stimulus package.

Q: Can I submit my application now?

A: The short answer is yes you can submit. But not all banks are accepting applications.

Q: Can I get PPP loan forgiveness in 2020?

A: Forgiveness timing is still up in the air, but it will most likely be in 2021 based on the bank’s and SBA’s timelines. Certain banks are taking forgiveness applications now, but unless your company has already applied it’s unlikely that forgiveness will happen in 2020. When we have more information Anders will advise clients on best timing to apply, but for now, patience is key as businesses have 10 months to apply after their covered period.

Q: Is there automatic forgiveness for PPP loans under $150,000?

A: No, but there has been language in each bill surrounding automatic forgiveness for smaller loans. Unfortunately, nothing has been passed at this time.


Year-end Planning Related to PPP Funds

Q: Are expenses paid with PPP funds deductible?

A: The IRS’s current position is that expenses paid with PPP funds are not deductible if your loan is forgiven. What is unclear is if the expenses paid with PPP funds are nondeductible for 2020 tax returns or not until 2021 when the loan is forgiven.

Q: Is there anything I should be doing for year-end tax planning regarding my PPP loan?

A: At this time, with so much uncertainty, year-end tax planning related to PPP funds will remain fluid.


Rumors of Another Stimulus Package

Q: Will there be a CARES Act 2.0?

A: It appears likely. The timing and dollar amount are the two largest unknowns. What seems to be important aspects of any bill could include:

  • Second round of stimulus checks for individuals
  • Reallocation of funds between different CARES Act 1.0 programs
  • Adjustments to the Paycheck Protection Program, including a potential second round of funding and clarification of ambiguous guidance
  • IRS corrections and guidance regarding deductibility of expenses paid for with forgiven PPP funds
  • State and local government funding
  • Liability protections
  • Unemployment assistance

Q: When could the next stimulus package be coming?

A: Timing is unclear and ever-changing. Stay tuned for more updates.

Legislation is continuing to evolve and it’s important to keep up with the latest rules and regulations to make sure you’re making decisions based on accurate data. Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

All Insights

August 27, 2020

How COVID-19 Has Impacted Rental Income for Landlords and Strategies to Recover

The U.S. unemployment rate spiked to 14.7% in April; the highest it has been since the Great Depression. High unemployment has caused landlords to be creative on how to solve issues arising from tenants that are unable to meet their rental agreement obligations. Landlords are using different techniques to keep vacancy rates down and rental income coming in. Some solutions landlords are considering include rental forgiveness, postponement or seeking outside short-term financing. 

Protection from Evictions Under the CARES Act

Previous to COVID-19, if tenants failed to meet rental obligations landlords had the option to terminate the tenancy by filing an eviction lawsuit to have the tenant physically removed. Health and safety concerns related to COVID-19 have halted evictions in some areas which has led landlords to think of other ways to cope with the lack of rental income. One of the ways landlords are managing their tenants’ inability to pay rent is by allowing postponement of their payments with an agreement that it will be repaid at a later date, either in a lump sum or spread out. Some have done this by agreeing to allow tenants to repay their missed payments when they receive government stimulus funds or by extending lease agreements and allowing payments to be made at the end of the lease. 

Every landlord strives to generate profits after covering any debt servicing with their rental property. However, with the affects of COVID-19, cutting losses has been the best option for some landlords. Temporarily lowering rent rates for tenants has allowed landlords with mortgages to retain tenants along with having the ability to meet their short-term financial obligations and not default on their loan.

How Landlords Can Recover

Having a financial safety cushion is important for landlords in times like these. Seeking a line of credit or having the assurance of being able to obtain a loan from a private lender is important as part of a disaster recovery plan. Many landlords have taken these measures to protect themselves and be better prepared in case of emergency.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below. Learn how Anders works with the real estate and construction industries.

All Insights

August 13, 2020

My Employee Tested Positive for Coronavirus, What Should I Do?

As the pandemic continues, employers are asking a lot of questions around what they need to do when an employee tests positive or is unable to work due to COVID-19. Is the employer required to pay the employee? Is there assistance available to businesses paying for sick leave when an employee tests positive? While some of the nuances should be advised by a lawyer or HR representative, below we dive into what types of relief are available for employers from an accounting perspective.

Are employers required to pay sick leave for COVID-19?

The answer is yes. The Families First Coronavirus Response Act (FFCRA) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Learn more about employee paid leave rights.

Is there assistance available for employers?

Yes. To help employers pay employees who are unable to work due to COVID-19, the FFCRA tax credit and disaster relief payments are available.

Families First Coronavirus Response Act (FFCRA)

When an employee is unable to work (including telework) due to COVID-19, the FFCRA provides a 100% credit against the company’s payroll tax liability. Companies and not-for-profits with less than 500 employees are eligible for FFCRA.

The credit is limited to the maximum amount that needs to be paid based on the sick leave cap of $511 per day for up to 10 days, or $5,110 per employee.

How does FFCRA work?

Employers pay the employee up front and take a dollar-for-dollar tax credit by reporting their total qualified leave wages and the related credits for each quarter on their federal employment tax returns.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

FFCRA Example

An eligible employer paid $5,000 in sick leave for a quarantined employee and is otherwise required to deposit $8,000 in payroll taxes. The employer would only be required to deposit $3,000 on its next regular deposit date.

For more information about the FFCRA, refer to the U.S. Department of Labor or IRS.

Disaster Relief Payments

With COVID-19 being declared a national emergency by President Trump, employers can now take advantage of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Act, also known as Section 139 of the Internal Revenue Code, allows employers to provide tax-free payments or reimbursements to affected employees as “qualified disaster payments”.

How do the disaster relief payments work?

Disaster relief payments must be to pay or reimburse an employee for reasonable and necessary personal, family, living or funeral expenses. This does NOT include payments that would be covered by insurance or other reimbursements and income replacement payments. Since this assistance Act has never been used during a global pandemic, it’s still open to interpretation on what expenses are qualified, but Section 139 “reasonably suggests” these expenses would qualify:

  • Over-the-counter medications, co-pays, deductibles and other medical expenses not covered by insurance
  • Funeral costs of an employee or family member of employee
  • Costs associated with enabling employees to work-from-home
  • Cost of employee’s childcare or tutoring for family members
  • Commuting expenses
  • Caregiver and domestic services
  • Legal and accounting expenses

Payments are tax-free to employees, but fully deductible to the employer. Employers may provide assistance directly to the employee or through a non-exempt fund established to receive contributions from the employer as well as employees.

What should employers document?

Documentation for payment is not required as long as it’s considered “reasonable and necessary”, but Section 139 recommends employers document:

  • Their intention for making the payments
  • The amounts paid and to whom
  • Start and end date of any Section 139 assistance
  • Listing of expenses paid or reimbursed
  • Any maximum amount per-employee or total combined amount employer will pay

Learn more about Section 139.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

Agnes M. Rybak, Associate + Outsourced Accounting and Ryan T. Knudsen, Senior Accountant + Outsourced Accounting were contributors to this post.

All Insights

August 10, 2020

How President Trump’s Executive Order Affects Payroll Taxes for Employees

On August 8, 2020, President Trump signed an executive order to defer certain payroll tax obligations to provide additional COVID-19 relief. The order directs the Secretary of the Treasury to “use his authority to defer certain payroll tax obligations with respect to the American workers most in need”.

Details of the Payroll Tax Deferral

This payroll tax deferral applies to employee wages paid between September 1, 2020 and December 31, 2020, to those generally making less than $4,000 biweekly. The deferral applies to the withholding, deposit and payment the 6.2% employee Social Security tax, not the Medicare tax. The CARES Act did have a payroll tax deferral, but it was for the employer, NOT the employee.

What You Should Do

It’s important to note that the President is calling for a payroll tax deferral, not forgiveness, at least at this time. The Treasury is exploring avenues to eliminate the obligation to pay the taxes deferred.

We advise taxpayers to wait for more guidance and/or CARES Act 2.0 to come out before making any plans related to the effective date.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential impacts and benefits. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

All Insights

June 25, 2020

Paycheck Protection Program (PPP) Loan Forgiveness Calculators and Tools

Tracking expenses is an important part of maximizing PPP loan forgiveness. Once you identify which expenses are eligible for PPP forgiveness, it’s time to start keeping track of these expenses and calculate your potential forgiveness amount. The Anders CARES Act Research and Response Team put together tracking tools you can use to make it easier when it comes time to start the loan forgiveness process.

Please note: these calculators provide an estimate based on our interpretation of the current guidelines, and actual loan forgiveness may differ when the SBA and banks release the loan forgiveness reporting forms.

Download the PPP Loan Forgiveness Calculator.

Download the 8-Week Full Time Equivalent (FTE) Calculator.

Download the 24-Week Full Time Equivalent (FTE) Calculator.

Download the Information Checklist to Apply for PPP Loan Forgiveness.

Updated 6/25/2020

Visit our COVID-19 Resource Center for other insights and tools surrounding the CARES Act.

All Insights

June 22, 2020

Anders to Merge in Cummings, Ristau & Associates

Effective June 30, 2020, Cummings, Ristau & Associates, a public accounting firm based in St. Louis County, Missouri, will combine its practice with Anders CPAs + Advisors. Partners David J. Ristau, CPA and Mark H. Cummings, CPA, along with 19 staff members will join Anders, bringing the firm’s total partners and staff to 230 with revenues of approximately $41.5 million.

Formed in 1996, Cummings Ristau carved out a unique and strong expertise in serving the banking industry in Missouri and Illinois. The partnership will provide the opportunity for Anders to add a new niche and expand the firm’s financial institution footprint. Cummings Ristau partners and staff will move to the Anders downtown office this summer.

“Adding a strategic partner with an established niche unique to our industry offerings, is important to our vision for growth, and we found a great match with Cummings Ristau,” said Robert J. Minkler, Jr., CPA/CGMA, Anders managing partner. “Given the current environment and the increasing relationship between clients, accountants and their bankers as a result of the Paycheck Protection Program (PPP) and other parts of the CARES Act, the timing of this merger will add value and expertise for clients from both firms. The role community banks and financial institutions will play in the recovery and growth of our economy has never been greater and we welcome the opportunity to provide them with the services and information they will require.”

Cummings Ristau provides audit, tax, regulatory compliance and loan review services to banks and credit unions. In addition, the firm also provides agreed upon procedures, IT audits, bank directors’ examinations, employee benefit plan audits and internal control reviews. “We are excited to join Anders and become a part of this diverse and expanding firm,” said Ristau, who has more than 30 years of Big 4 and banking experience including his time at Cummings Ristau.  Anders resources will provide a new line of advisory services as well as enhanced tax and audit capabilities to our clients, along with great administrative, human resources and marketing support for our team.”

While Anders has served the broker/dealer and financial services industries since the firm’s inception, Minkler says the depth of experience Cummings Ristau brings to Anders “will provide us the ability to serve these clients at a deeper level and bring our expertise in technology, systems, best practices and other services to these banking clients.”

Cummings, who has served as a Big 4 partner and bank executive vice president, CFO and director concluded, “we have been searching for the right partner for some time and have found one in Anders.  Our values of providing clients with personal attention, making a difference to their bottom line and being committed to developing long-term relationships is exactly in step with Anders mission, vision and core values.  We look forward to be a part of the firm’s growth and strategic plan for the future.”

All Insights

June 5, 2020

Paycheck Protection Program Flexibility Act Will Make Loan Forgiveness Easier

On Friday, June 5, the President signed into law the Paycheck Protection Program Flexibility Act of 2020. This Act updates restrictions to make it easier for businesses to have their PPP loans forgiven. Below is a summary of the legislation.

Changes to PPP Loan Forgiveness

  • Covered period extended to 24 weeks rather than 8 weeks.
  • Rehire exemption date extended to December 31, 2020 from June 30, 2020.
  • June 30 remains the deadline to apply for a PPP loan.
  • If FTEs and wages are not restored by December 31st, the loan forgiveness may not be reduced if the borrower is:
    • Unable to rehire an individual who was an employee on or before 2/15/20; AND
    • Able to demonstrate an inability to hire similarly qualified employees on or before 12/31/20; OR
    • Able to demonstrate inability to return to same level of business activity such business was operating at prior to 2/15/20 due to compliance requirements or guidance issued by certain federal organizations.
  • Rather than using 75% of PPP funds on payroll costs, the borrower now should use at least 60% of PPP funds for payroll costs and up to 40% on non-payroll costs. While the bill appears to be written that 60% of funds must be used on payroll or no amount of the PPP loan is forgivable, there is strong conversation and inclination that the 60/40 rule will be interpreted similar to the previous 75/25 rule.
  • Businesses are required to apply for forgiveness within 10 months of the end of the covered period.
  • If a covered loan was received prior to this enactment, the borrower may elect to keep their original 8-week covered period.
  • Taxpayers that have a PPP loan forgiven are now also be eligible to delay payment of employer payroll taxes – they were previously prevented from doing so if they had a PPP loan forgiven.
  • New PPP loans now have a 5 year loan term rather than 2 year loan term. For existing PPP loans, you may be able to modify your maturity at the discretion of your lender. Although the term could increase, the interest rate remains at 1%.

How the New PPP Loan Forgiveness Changes Benefit Businesses

These changes give people a chance to step back and slow down, even for those at or near the end of their 8-week period.  They are meant to make it easier for businesses to have their PPP loan forgiven, and will be a relief for nearly all businesses with PPP loan proceeds. These changes now allow business owners the time to make strategic business decisions versus knee-jerk reactions.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

Watch our CARES Act Team break down the highlights of the Act:

All Insights

April 16, 2020

Using PPP Loan Proceeds to Maximize Loan Forgiveness

Updated 6/8/20

One of the biggest areas of CARES Act that benefits businesses is the Paycheck Protection Program (PPP). With big benefits, comes many questions around one detail specifically: loan forgiveness.

Which loan expenses are forgivable?

According to the CARES Act, if you spend the loan proceeds on four specific categories while maintaining the same level of employees your loan should be forgiven:  

  1. Payroll – The SBA declared that payroll costs include gross salaries and wages of employees up to a cap of $100,000 per year (on an annualized basis), employer-paid health insurance, employer-paid 401k matching contributions, and employer-paid state and local taxes on payroll (e.g., unemployment insurance), among other things. Payroll costs do not include the employers portion of payroll tax expenses such as Social Security and Medicare. Recent updates added a requirement that at least 60% of the loan forgiveness amount must be attributable to payroll costs.
  2. Rent – Eligible rent expenses include payments under a lease agreement in force before February 15, 2020.
  3. Utilities – The CARES Act defines utilities narrowly to include electricity, gas, water, transportation, telephone, or internet service for which service began before February 15, 2020. 
  4. Interest – Interest payments can be for debt obligations that are a liability of the borrower incurred in the ordinary course of business and before February 15, 2020. The underlying debt must be a “mortgage on real or personal property.” This would include debt on real property that is secured by a traditional mortgage lien as well as working capital lines of credit and other indebtedness where a UCC-1 is filed on the borrower’s personal property. This definition does not appear to include unsecured debt.

What are the stipulations for forgiveness?

Beyond the four categories, there are a few other stipulations businesses must follow for their loan to be forgiven:

  • Businesses must maintain the headcount and salaries of employees as the same pre-COVID-19 level.
  • The expenses need to be paid for during the covered period. Recent updates allow the covered period to be up to 24 weeks. Existing loans (as of June 5, 2020) may choose to keep their 8-week covered period.

If these requirements are not met, the loan must be repaid. New loans will have a loan term of 5 years, and existing loans may be modified from 2 years to 5 years at the discretion of your lender.

How can I maximize loan forgiveness?

If your payments follow the above criteria, there are two payroll calculations to use to determine the actual forgivable amount. The first calculation is a measurement of the number of Full Time Equivalents (“FTEs”) and the second is a measurement of actual salary expense. These calculations verify that the expenses are directly related to the purpose of the CARES Act: keeping employees working at wages comparable to pre-COVID-19. 

Headcount Calculation

If a business reduces its full-time employees during the covered period, the forgiveness amount is reduced by a ratio defined as: 

  • The average number of FTEs during the covered period divided by the average number of FTEs during the base period.
  • There are three different options to determine the base period, and borrowers can select the one most favorable:
    • Using 2019 Information –the average number of FTEs per month from February 15, 2019, through June 30, 2019
    • Using 2020 Information –the average number of FTEs per month from January 1, 2020, to February 29, 2020
    • Seasonal Businesses –the average number of FTEs per month from February 15, 2019, through June 30, 2019
  • There are provisions within the act that will help restore some or all of the forgiveness if displaced employees are rehired prior to December 31, 2020.  Please consult your advisor for further clarification. 

Wage Calculation

The CARES Act introduced a forgiveness penalty for companies who reduced wages per employee by more than 25% compared to the most recent quarter before the PPP loan was made. For purposes of this calculation, businesses only need to consider employees who makes $100,000 or less per year. The statute compares an eight-week period to a three-month period, so we expect further guidance will clarify the method of calculation.

How can I start planning?

The loan forgiveness process will be administered by your bank and we expect they will request supporting documentation to validate. Once a loan is received from the PPP program, businesses will need to be strategic about how to bring employees back, how to spend the funds, and how to ensure you receive the maximum amount of loan forgiveness. Here are a few planning points we suggest: 

  • Make sure proceeds are used on covered expenses only to maximize forgiveness
  • Use at least 60% on payroll expenses
  • Keep thorough documentation of how the proceeds are used so you can apply for forgiveness

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Learn more about the Paycheck Protection Program or visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

It’s important to work closely with your banker and to expect changes as the program is still evolving.

All Insights

Keep up with Anders

Want to keep up with all the latest insights from Anders? Subscribe and receive the information that matters to you.

  • This field is for validation purposes and should be left unchanged.