In an attempt to get this to you ASAP we are relying on available information, IT IS CHANGING FAST, but the PPP Plan for now, is a first come, first served basis! You may want to act quickly.
Break In : If you don’t have a Twitter account, the time is now – many of the CARE ACT services are crashing their regular sites, as such communication is being made via Twitter … If you REALLY do not want a Twitter account, just use it as a browser, however by having an account you can subscribe to whatever entity you need to follow and you will be notified immediately as they comment.
BREAK IN: Your local bank will likely be able to accept an application FRIDAY APRIL 10, we would suggest you contact your bank about this plan immediately as Friday is a Holiday for many!
The following is most fitting for an Self Employed Employer or Solo Practitioner who has been displaced!
The Care Act was signed into law on Friday, March 27, 2020 and includes a provision for Employers to extend workers pay and possibly NOT REPAY!
The “PPP” Paycheck Protection Plan
BREAK IN: Using Texas as our template the Pandemic Unemployment funds are not being delivered yet as there are too many regular Unemployment requests in front of the plan.
BREAK IN: There is some dialogue that if you have ANY income you may not be able to use the Pandemic Unemployment funds and you may not be able to use both the funds at the same time – This PPP Plan for Solo or Self Employed is likely a faster and better solution at this time.
Forgiveness loan that can be totally FREE to business owners if they qualify and use the funds appropriately. If not, they will receive a UPDATED TERMS 2 year term, 1% interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.
The purpose of this loan is too pay your salary and other expenses…see below.
Available for solo owners of less than 500 people who were or have been adversely affected by the Corona Virus.
Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.
Must be applied for by June 30, 2020!
Repayments will not commence UPDATED : IN SIX MONTHS!
Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY
IF the entire loan is used completely within eight weeks and is used for any of the following:
- Payroll costs
- health insurance premiums and other healthcare costs
- Salary and net income from business
- Mortgage interest (excluding amounts pre-paid)
- Other business interest incurred prior to February 15, 2020
It may be completely forgiven (NO TAXES IN ANY WAY OR PAY BACK AS WE KNOW OF NOW) if the practitioner meets the following employee limits:
- The business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or
- from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably.
You may not cut any employees <$100k annually by more than 25% or they will not count towards the above headcount.
Again this information is changing quickly, so be sure to confirm with you Banker his comprehension of this!
Have a Great “PPP Solo Plan” Day!
John A. Kvale CFA, CFP