All Things PPP For Charlotte Businesses
With the 3/15 deadline nearing for corporations, we're knee-deep in tax filings.
On top of that, Congress keeps throwing fresh challenges our way. The “American Rescue Plan” was passed by the House, and there are certain stimulus-related items to be aware of.
One thing to keep in mind for my business clients: while the federal minimum wage raise was included in this measure, my sources tell me that it is unlikely to remain in the final bill that reaches the President's desk. I'll keep you updated, and we can assist you in working through any issues that may arise.
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All Things PPP For Charlotte Businesses
“Success is not final, failure is not fatal: it is the courage to continue that counts.” -Winston S. Churchill
The Biden administration recently announced that the PPP for Enterprises programme would be expanded to include more small and minority-owned businesses.
However, there are a few things to keep in mind.
Here are the fundamentals before I get into the new stuff that were announced last week.
First and foremost, if you have not yet applied for the PPP for 2020, I strongly advise you to do so now. For many enterprises, these are basically government "grants" (because of how these loans are forgiven). It's acceptable if you have a philosophical objection to doing so. But, aside from that, this is one of those once-in-a-generation “use it or lose it” apps.
If you were not selected in the first round of PPP, you may still be able to apply for the “Second Draw” PPP. If your company meets the following criteria, it will be entered into the second draw:
- Received a First Draw PPP Loan in the past and will or have utilised the entire money strictly for permitted purposes
- Have a maximum of 300 employees; and
- You can show a decline in gross receipts of at least 25% between comparable quarters in 2019 and 2020.
That last provision is good since it implies we can look into a number of conditions to see if you're eligible.
Both "first draw" and "second draw" forgiveness terms are virtually the same:
- Employee and remuneration levels are kept at the same level.
- The money from the loan is used to pay for wages and other qualified expenses; and
- At least 60% of the proceeds are used to cover payroll expenses.
For loans under $150K, there is a "streamlined" process.
Finally, and this is the major news: there is a unique opportunity for smaller and minority-owned enterprises to apply before large corporations, which closes on Tuesday, March 9th.
Because the programme funds were swiftly depleted in 2020 (and notably in the first round of funding), many businesses missed out on acquiring these loans. That was less of a problem in the second round of fundraising, but who knows what may happen in the "Second Draw."
That is why I recommend that you contact us as soon as possible so that we can assist you with your application.
And if you need some assistance with the math to make this happen, we're here to help:
(And please refer your friends to us if they require assistance.)
I appreciate our collaboration and your recommendations.
Kohari & Gonzalez PLLC
Please feel free to forward this article to a business associate or client in the Charlotte area (or beyond!) who could benefit from our help. While most of these articles are about company strategy, as you may know, we specialise in tax preparation and planning for families and small businesses.
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