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UPDATED: Webinar hosted by The Herring Group will address PPP FAQs

May 26, 2020 -  By

Updated on May 26:

To help understand the federal Paycheck Protection Program (PPP) and answer any questions you may have about the process, The Herring Group will host a webinar on Tuesday, May 26, at 2 p.m. EST. Register here for the webinar.

One of the important values of The Herring Group is to save landscape company owners and managers time. There are some recent developments related to PPP loan forgiveness that would make it a waste of your time for us to explain how to complete a PPP loan forgiveness application.

Just recently, the House and a bipartisan group of Senators have independently advanced bills to “ease” some of the terms of forgiveness for those businesses who have received PPP loans. As an example, these bills add additional types of expenses (e.g. personal protective equipment) that will qualify for PPP forgiveness and increase the length of time for incurring and paying payroll and other expenses from 8 weeks to 16 (the Senate) or 24 weeks (the House). Based on news reports, I do not believe anything will be finalized for at least 10 days.

Because of the possibility of the new law, we are going to change the format of the webinar on Tuesday, May 26, and reduce the time to one hour. We will discuss some high-level topics that are not likely to change (e.g., how to calculate at FTE and what periods to use) and answer any immediate questions that you may have. If you have specific questions, please email them to Greg Herring at greg.herring@herring-group.com and we will be sure to address them.

Posted on May 19:

Last week, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) Loan Forgiveness Application.

While there is no specific deadline to complete the application, The Herring Group recommends completing the paperwork within the next two months.

This webinar is designed for both the landscape business owner and the person who will be completing the forgiveness application.  In the webinar, it will address “owner-level” issues at the first part of the webinar and more tactical numbers issues (e.g., completing the form) for the second part of the webinar.

Once a PPP loan forgiveness application is submitted, the bank (and SBA) has 60 days to review the application for forgiveness and issue its decision.

Here are some helpful pointers to help begin the process:

The 11-page PPP Loan Forgiveness Application finally defines full-time-equivalent (FTE) employees (page 7):

  • Divide each employee’s hours by 40 hours per week and round to the nearest tenth (with a maximum of 1.0);

Or for most, but not all, calculations:

  • Employees who work more than 40 hours per week are assigned a value of 1.0 and employees who work fewer than 40 hours per week are assigned a value of 0.5.

There are three areas where The Herring Group believes the SBA position is uncertain:

  • Can bonuses be included in compensation during the eight-week period?
  • Can vehicle and equipment leases be included as “rent” during the eight-week period?
  • Can gasoline and diesel fuel be included as utility costs during the eight-week period?

Most landscape companies fall into one of three categories:

  • Category 1: Clearly have more average FTEs than the “base period” and will likely receive 100 percent forgiveness;
  • Category 2: Clearly have fewer average FTEs than the “base period” (and will not receive 100 percent forgiveness); and
  • Category 3: It is close, with average FTEs and/or 100 percent forgiveness.

For those in Category 1, the application will be simple. Those in this category can ignore the uncertainties mentioned above.

For those in Category 2, The Herring Group believes that the SBA will come out with changes that might improve their position related to forgiveness.  Therefore, they should delay applying for forgiveness to see what changes the SBA might make.

For those in Category 3, if the 8-week period will be complete soon, they may want to consider paying bonuses to employees making less than $100,000 per year if the SBA provides more guidance or if you are comfortable with the current risk. Similar to Category 2, they may also benefit from some other clarifications that the SBA may issue.

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