Alert: PPP Loan Updates from Your Part-Time Controller, LLC
July 10, 2020
We wanted to share with you a few quick updates in regard to the Paycheck Protection Program (PPP), and respond to some of your frequently asked questions.
Below are highlights from the extension and SBA guidance:
- Paycheck Protection Program extended to August 8th. Last weekend, the president signed legislation which extends the deadline for businesses to apply for PPP loans. You can view a list of participating lenders here. Keep in mind that (as of now) businesses can receive only one PPP loan. Nonprofit businesses eligible to apply include 501(c)(3), 501(c)(19) veterans’ organizations, Tribal businesses, and faith-based organizations.
- SBA released loan data. This week, the SBA released PPP loan data. Business names were not released for loans under $150K. Loan details are available for download from the SBA.gov website.
- According to information released by the SBA, 42,462 nonprofit organizations received PPP Loans of $150K or more. Of that, 410 nonprofits received loans between $5M-$10M; 3,248 received loans between $2M and $5M; 5,150 received loans between $1M and $2M; 13,613 received loans between $350K and $1M and 20,041 received loans between $150K and $350K.
- Apply for loan forgiveness any time on or before the loan maturity date. If a borrower has spent all the loan proceeds for which it is requesting forgiveness, the loan forgiveness application can be submitted any time on or before the maturity date of the loan, including before the end of the covered period. However, if a borrower has reduced any employee salary or wages in excess of 25 percent, and applies for loan forgiveness before the end of the covered period, the borrower must account for the salary reduction for the full 24-week or 8-week (loans issued before 6/5) covered period.
- Apply for loan forgiveness within 10 months or payments will start. If a borrower does not apply for loan forgiveness within 10 months after the last day of the covered period, the borrower must begin paying principal and interest.
- No double-dipping. Expenses submitted for PPP loan forgiveness cannot also be charged to other funding sources. This is particularly important when dealing with federal awards. The Office of Management and Budget (OMB) issued a memo on this topic but in short they state: “…payroll costs paid with the Paycheck Protection Program (PPP) loans or any other Federal CARES Act programs must not be also charged to current Federal awards as it would result in the Federal government paying for the same expenditures twice.”
- No single audit requirements. PPP loans are not subject to the Uniform Guidance single audit requirements, but Economic Injury Disaster Loans are.
- Be patient with your lender. Lenders are still working on setting up their portals to accept loan forgiveness applications and most are not ready yet. In addition, the SBA continues to release clarifying guidance which may delay lender rollout.
We discussed many of your frequently asked questions in our 6/26 Staying Afloat webinar. If you missed it, please visit our Staying Afloat Resources page to download a copy of the slides or to listen to the recording.
As always, YPTC is here to help! Access our Staying Afloat Resources web page for information and resources to help your organization stay financially afloat during these times of uncertainty.