It’s been a while since we have chimed in on the Paycheck Protection Program (PPP). A lot of that has to do with the fact that there is still so much uncertainty around the Program and what should be done next by you, the banks, the SBA and so on. Unfortunately, continued changes are undoubtedly coming. With that said, we thought it was time for a check in from Meadows Urquhart’s perspective.
At this time, many banks have not started accepting loan forgiveness applications. They are in a wait and see mode. But some banks have been accepting and simply holding on to forgiveness applications. Initially, they had no choice but to hold the applications because the SBA was not accepting them, but this changed when they opened their portal on August 10th. With that said, many of the banks are still not processing the forgiveness applications they have collected because more guidance is expected that will bring on additional changes. For example, just last week, the SBA provided guidance that specifically stated vision and dental benefits paid by the employer on behalf of the employees are considered group health-care benefits and thus would be considered an eligible payroll cost. Many of us assumed this was the case but now that clarification has been made. There is other legislation that is pending or under consideration that relates to the Paycheck Protection Program such as:
- effectively forgiving any loan under $150,000 through the signing of a short certification form,
- opening the PPP up for businesses to receive a second round of money, if they qualify,
- and potentially allowing any eligible costs utilized for forgiveness to be deductible for tax purposes as well.
So long story short, there is still a lot up in the air. And as a result, our default recommendation to our clients is to sit back and wait to apply for forgiveness. Wait and see how the process goes, let the wrinkles get ironed out and follow where the guidance leads us. For almost everyone, at this point, forgiveness has become more a matter of when, not if, assuming the proper use of funds.
For those of you that are ready to jump in head-first to put the Paycheck Protection Program in your rear-view mirror, we understand that motivation also. We are here to assist and have been doing so for several of our clients. If you are ready to move forward, the next step is to reach out to your bank to determine if they are currently accepting applications and what specific documentation they require. Then, let us know and we will help where we can.
While we realize this communication does not have a lot of definitive answers – the answers we all want – we do hope it provides a little insight into where we stand in the process. If you have additional questions or concerns don’t hesitate to contact me. Take care and be safe.