SBA Paycheck Protection Program Loan Forgiveness Application
Weeks after loans started going out the SBA has launched it’s payroll protection program loan forgiveness application.
What’s in it?
What does it look like?
What should you be considering?
Join attorney R. Shawn McBride on the McBride Attorneys Law Show YouTube Channel for an early review of this key document.
#sba #payrollprotection #ppp #ppploan #loans #business #smallbusiness #loanforgiveness #business planning
NOTE: Legal issues are discussed. This is for information and entertainment purposes. This is not legal advice and no attorney-client relationship is formed. Consult your own attorney.
Please comment with your thoughts and questions but do not include any confidential information.
Here is a machine transcript of the show:

00:00:01.050 –> 00:00:09.360
The Our Shawn: Hey everyone, are Sean McBride. Here the SBA has come out with its new payroll protection loan application recently released so

00:00:09.780 –> 00:00:14.940
The Our Shawn: A lot of people been getting alone. You might be one of the companies that did get a payroll protection loan.

00:00:15.630 –> 00:00:26.100
The Our Shawn: So let’s stop. Let’s take a look through it together here and let’s let’s see what’s going on. Hair and educate ourselves a little more and kind of do a no nonsense tour of it.

00:00:26.550 –> 00:00:34.710
The Our Shawn: One thing you’ll notice, looking at it is that this SBA application doesn’t do follow some of the initial guidance that we had

00:00:35.220 –> 00:00:46.410
The Our Shawn: As far as what was going to be in it and what it would mean and the 75% threshold. We’ve talked about it there. It looks a lot like an IRS tax form so

00:00:47.040 –> 00:00:55.860
The Our Shawn: As always we’ll be talking about some legal issues today, but we won’t be getting into legal advice for that consult an attorney, we’re just going to be

00:00:56.340 –> 00:01:03.570
The Our Shawn: Kind of taking a high level overview. So we’re share my screen with you here so that we can see this together.

00:01:04.080 –> 00:01:08.550
The Our Shawn: And let’s kind of work through this payroll protection program and what’s going on here. So,

00:01:09.120 –> 00:01:17.910
The Our Shawn: You can see I’m on the SBA website. Here you can see the URL up here. I just Google payroll Protection Program loan forgiveness application.

00:01:18.510 –> 00:01:28.020
The Our Shawn: Which is exactly what size of the top of page. So there is make sure you’re going there. You know, I could see some people doing some scams or some other things around this.

00:01:28.410 –> 00:01:34.230
The Our Shawn: Where potentially they would distract you, or lead you to go to the long side so make sure on the SBA site.

00:01:35.190 –> 00:01:43.680
The Our Shawn: We’re going to go ahead and download this PDF for it up here on the screen, so we can all go through it together. I’ve already taken a preliminary look at it together. But I wanted to highlight

00:01:44.190 –> 00:02:04.200
The Our Shawn: Some of the big points that I see here. Now one thing to note here is unlike the IRS forms, we have the instructions and the application all together. So some people made a big deal out of fact this is 11 page application. So it is a little bit old lady application, but it’s

00:02:05.640 –> 00:02:16.620
The Our Shawn: It’s designed to have both the instructions and the end loan application all built together. So don’t get overwhelmed by it. We’re going to take it step by step here and kind of give you an idea.

00:02:17.040 –> 00:02:24.960
The Our Shawn: Of how it works here. Now I’m going to zoom to page three, which is where the actual application and calculation form starts. So

00:02:25.710 –> 00:02:32.670
The Our Shawn: Here you can see, you know, some of this is pretty simple name business address tax ID number contact information, you should always

00:02:33.030 –> 00:02:36.990
The Our Shawn: Obviously, have all that for your business, right, we can see that right there at the top of the page.

00:02:37.950 –> 00:02:48.240
The Our Shawn: You’re gonna get some information from your lender to PTP numbers, etc. And then you’re going to put in your employee numbers, which obviously there is the they want to continue the employees. So that’s a

00:02:49.200 –> 00:02:58.260
The Our Shawn: Important thing. Now you’ll see down here. They have covered period at alternate covered period. We’ll talk about that in a minute. That’s an important concept.

00:02:58.920 –> 00:03:03.240
The Our Shawn: To work in there and then basically you’ll get into this forgiveness calculation.

00:03:04.080 –> 00:03:17.850
The Our Shawn: Where you just basically roll through like an IRS Form. Right. So those of you that have reviewed your tax form perhaps on you have prepared your own tax forms, this will probably look a little familiar than have the same box as you would see on the

00:03:18.930 –> 00:03:25.920
The Our Shawn: IRS Form. But, you know, kind of calculate line one line to line three line for

00:03:27.600 –> 00:03:33.240
The Our Shawn: And then there’s adjustment factors, much like you would see in an IRS Form tells you to add certain lines together.

00:03:34.050 –> 00:03:47.340
The Our Shawn: Basically here you’re adding all your qualifying costs together, but you’re subtracting some weight reduction. This is for the people are making over $100,000 a year and some other factors and then

00:03:48.360 –> 00:03:58.350
The Our Shawn: You know, you see the full time employee calculation coming here, get you to modify total loan amount, then you calculate the 75% requirement.

00:03:58.890 –> 00:04:07.200
The Our Shawn: And then it gives you the forgiveness amount. So it’s all very computational once you start plugging the numbers and you follow the instructions to compute, much like you would with an IRS Form.

00:04:07.950 –> 00:04:13.470
The Our Shawn: There is a disclosure piece here where it says, you know, use the money for proper purposes.

00:04:14.310 –> 00:04:22.710
The Our Shawn: You verified the payments you gave original documents to the lender required documents and a lender, etc. So

00:04:23.610 –> 00:04:36.270
The Our Shawn: A lot of requirements here to make sure, basically, you’re telling the truth and you give them the accurate document. See, you know, obviously, anytime you’re dealing with government form. You don’t want to miss disclose it. But of course, here you’re going to actually have to sign to it specifically

00:04:37.350 –> 00:04:49.350
The Our Shawn: You can see here is the continuation of instructions. Again, don’t get overwhelmed by this because you’re just going to follow it down the form this literally here’s a page telling you how to fill in.

00:04:50.220 –> 00:04:56.070
The Our Shawn: The schedule so you know you’re going to go through this and for most people to be fairly simple. Right.

00:04:57.720 –> 00:05:01.110
The Our Shawn: Your fill the form and as it goes cash compensation.

00:05:01.590 –> 00:05:11.220
The Our Shawn: Average number of full time employees and these are all just going to get computations to get those kind of requirements we talked about. We did an earlier video here on McBride attorneys law show

00:05:11.700 –> 00:05:25.860
The Our Shawn: We talked to attorney Terry traveling who came on fellow Council, we work together on some projects from time to time and Terry came on and kind of talk through the early guidance on and and there’s nothing really new here. So that’s the good news.

00:05:27.090 –> 00:05:40.200
The Our Shawn: The key is, it’s all now in a computational government form that you’re gonna have to fill out and a little tricky, right. So let’s scroll back up to the top here. So I’m going to pick up an important concept here. Now we as lawyers.

00:05:40.950 –> 00:05:47.340
The Our Shawn: Spend a lot of time on definitions. Right. And again, what I’m going to show we always do general legal discussion to help educate

00:05:48.090 –> 00:05:53.790
The Our Shawn: To entertain inform but to get real legal advice you can talk to your lawyer, so we’re just gonna talk very general here.

00:05:54.210 –> 00:06:05.730
The Our Shawn: And you can see one of the concepts here is this alternate payroll cover period. This is, this is something that a lot of us would noting early on we might be a problem.

00:06:06.570 –> 00:06:19.230
The Our Shawn: In that some employers pay employees and now the PPP had this eight week period which was so critical. But on the flip side,

00:06:20.760 –> 00:06:28.380
The Our Shawn: Some people’s payroll dates might not line up to that eight week period. So we do get some relief here from the government in that

00:06:29.400 –> 00:06:41.970
The Our Shawn: They’re saying, hey, use an alternate period. So for some people, you can shift only if you have a bi weekly or more frequent paper. Now, this is, this could be an issue for some employers, but some employers pay monthly

00:06:43.260 –> 00:06:51.930
The Our Shawn: You know, particularly in some of the professions and some pay you know twice a month semi monthly which is less frequently than bi weekly. So some employers are still gonna have a problem here.

00:06:52.350 –> 00:06:59.430
The Our Shawn: If you’re a bi weekly or more frequent employer, like many employers pay their employees every two weeks allowed hourly employees.

00:07:00.750 –> 00:07:10.710
The Our Shawn: This is going to allow you to potentially shift this cover period to pick up more payroll. So this is very important, but you got to make sure you check the coverage period.

00:07:11.520 –> 00:07:22.830
The Our Shawn: Box here alternate coverage period that that showed up later on the forum where we looked at earlier if you’re over $2 million they’re asking you to check the box.

00:07:23.340 –> 00:07:30.180
The Our Shawn: And say that you and your affiliates are over $2 million. This is going to probably trigger the audit, because what we’re hearing from the SBA is

00:07:30.600 –> 00:07:36.450
The Our Shawn: Artists for loans over $2 million loans under $2 million are generally going to be considered least in the latest guidance.

00:07:36.750 –> 00:07:48.270
The Our Shawn: To be in good faith, so we don’t have to smaller loans probably are getting audited unless there’s a problem popping up the bigger loans. On the other hand, are more likely to have an issue right so

00:07:49.980 –> 00:08:00.780
The Our Shawn: Way to keep that in mind as we’re going forward. So big loads. You know you want even more careful with your documentation, no matter what your size you want to make sure you have your documentation, right, obviously.

00:08:01.530 –> 00:08:13.170
The Our Shawn: Um, but, for if you’re getting a big loan. You want to make sure that you’re really got all your ducks in a row because you’re probably getting a audit. In addition to having the bank look over the paperwork, so

00:08:13.740 –> 00:08:19.620
The Our Shawn: Make sure you keep a nice neat file there as you should always be doing with your tax returns, etc. So

00:08:20.640 –> 00:08:29.670
The Our Shawn: Yeah. Again, nothing really huge or surprising here. Your account should definitely be informed on this. You should call your account.

00:08:30.360 –> 00:08:42.210
The Our Shawn: As you’re preparing for loan forgiveness. Make sure you’re familiar with this, make sure their computing the numbers this alternate pay period again gives us some relief and may cut off the need to do some of these

00:08:43.530 –> 00:08:56.160
The Our Shawn: Stuff stub pay periods. We talked about an earlier videos, the concept that you’re going to have to cut off the pay period and then start a new pay period of that may be relieved by the alternate pay period, depending on

00:08:57.600 –> 00:09:05.520
The Our Shawn: Your thing and you can see here’s the pay frequency right weekly and bi weekly or more frequent and so these two boxes gets you

00:09:06.840 –> 00:09:11.790
The Our Shawn: The potential to get that relief, where you can use the alternate current period. But if you’re paying twice a month or monthly

00:09:12.150 –> 00:09:20.370
The Our Shawn: You’re not frequent enough and you don’t get the use this alternate payroll cover periods. So you may still have some real planning to do depending on your payroll cycle.

00:09:20.940 –> 00:09:34.740
The Our Shawn: And then from there, it’s filling in this form, but your accountant should be looking at this form in advance or if you’re doing your accounting work, you should be looking at this form in advance, understand how the numbers are in a flow, make sure that you are going to get your expected

00:09:35.850 –> 00:09:48.480
The Our Shawn: Forgiveness. Right. And so, work through that and you’ll see you have a lot of information to fill in here, but this is all stuff. You should be keeping in normal course of your record keeping. You’re just going to have to then put this one to this government for so

00:09:49.560 –> 00:09:55.650
The Our Shawn: I don’t think there’s any major surprises here. The alternate cover period is really a relief for some people, that’s going to help

00:09:56.310 –> 00:10:01.710
The Our Shawn: There’s also some safe harbors in here for employers that don’t meet the payroll periods or

00:10:02.370 –> 00:10:09.300
The Our Shawn: Have other issues with getting employees to come back they have already built some relief in there. You can see this relief is built into the form so

00:10:09.780 –> 00:10:20.700
The Our Shawn: Really, this isn’t mechanical following of the guidance. We’ve gotten so far and it really worksheets through itself if big thing is if you’ve taken the loan, get this format here now.

00:10:21.210 –> 00:10:30.750
The Our Shawn: Today, as soon as you see this video and certainly well before your eight week period finishes up, run the calculations know the amounts, make sure that you understand

00:10:31.950 –> 00:10:37.770
The Our Shawn: That this is how it’s going to compute compute so that you don’t have a surprise when you go forgiveness.

00:10:38.190 –> 00:10:45.480
The Our Shawn: We love your comments and questions drop them here at the McBride attorneys law show on YouTube and I’ll be I’ll be looking through the comments there.

00:10:45.840 –> 00:10:55.890
The Our Shawn: Of course would love to have you subscribe to our channel. And so we can bring you more tips and ideas. Everything we do is geared to helping business owners and business leaders be more effective in what they do.

00:10:56.580 –> 00:11:01.590
The Our Shawn: The McBride attorneys law show really focuses on some of the legal questions and issues that come up in

00:11:01.980 –> 00:11:12.120
The Our Shawn: The owning and operation of business. Alright folks. I hope that was helpful. Looking forward to your comments, drop a like on YouTube if you like it to other business owners can see it. Of course, share it around with your friends.

00:11:12.570 –> 00:11:25.980
The Our Shawn: Let them know. And I want to hear your questions, glad to do supplemental if I hear enough comments of people needing additional information. Alright folks are shamanic Brad sign off on it. McBride attorneys law show on YouTube, make sure you subscribe and I’ll see you again very soon.