Hopefully you have successfully navigated round one or round two of PPP loan funding. Now, you may want to take advantage of the loan forgiveness provisions. The rules are changing daily, but here is what we know today. This is not an easy area to navigate, so feel free to contact us directly with questions specific to your business.
Please keep in mind that this should make economic and practical sense for your business. Forgiveness may not be your only priority, because the loan terms are excellent, even if not forgiven. Accordingly, please consider your priorities, for example:
- Retention of employees,
- Liquidity needs (survival), or
- All, some, or a combination of the above.
Once you establish your priorities, then you can properly address forgiveness.
To the extent you want to maximize forgiveness, you must limit your loan spending to the following items:
- Payroll costs*,
- Interest payments on mortgages (both real and personal property) incurred prior to 2/15/2020,
- Rent, and
- Utility payments (including telephone and internet).
*Payroll costs include payments made for:
- Salary, wage, commission (up to $100,000 pro-rated for 8 weeks),
- Vacation, family, medical, or sick leave,
- Dismissal or separation (severance),
- Employer’s portion of group health care, including premiums,
- Retirement benefits, and
- State and local payroll taxes.
Fournier Legal Services has been a customer-service oriented, technology-based, paperless law firm from the day we opened, and we are uniquely positioned to help our clients navigate the current environment. For any questions related to Business Law or Estate Planning, please contact us by calling 860.670.3535 or emailing firstname.lastname@example.org.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.