W I Pay Tip of the Day – PPP Program

We want to check in with you again during this unique time for all of us both professionally and personally.  We have somewhat absorbed the new COVID19 legislation designed to provide small businesses with lifelines to make it through this tough time and have assisted many of you, providing reports, copies of returns and other data so you could complete your application for the PPP Loan.  Many of you have successfully completed your applications and been approved. For those not yet approved and heard that the well has run dry – stay calm – more funding is expected. When you receive your funding, breathe a sigh of relief, crack a smile and get a good night’s sleep. While you are enjoying that feeling, please start from day one to think about the next steps. 

The PPP program has a highly desirable component to it, that being the potential for the loan to be fully forgiven.  This depends on how you utilize your funds over the eight weeks starting the day you are funded.  If you get funded tomorrow, April 21st, your measurement period will end on June 16, 2020. Your use of funds during this eight-week period will determine how much, if any, of your loan will be forgiven. 

Basically, you must spend at least 75% of the funds on payroll. The remaining 25% can be used on rent and utilities. What constitutes “utilities” is still open for clarification which hopefully will come out shortly.  We obviously expect electric, water, gas, etc. to qualify, but the question is on internet, cell phones, etc. 

Our tip of the day??  KEEP ACCURATE RECORDS! 

Some banks are requiring a separate bank account to deposit the PPP funds, others not, and the funds go into your existing operating account.  Either way, you must keep extreme detail of what you use the loan funds for.  If you were required to have a new bank account and plan to just use the bank statements from that account as your back up, don’t use funds in that account to pay for things that won’t qualify for forgiveness such as, marketing, association dues, etc.  If the funds are commingled in your Operating account, somehow designate which expenses are being paid from the loan proceeds.  The more detail you put into it now, the easier it will be for you come late June, early July when you are applying for Loan Forgiveness. 

All the best to everyone.  We at WI Pay are here to help as much as we can, including tracking your payroll spending for you. 😊