馃攳
Tips for PPP Loan Forgiveness | What to do if you receive a Paycheck Protection Program Loan - YouTube
Channel: All Up In Yo' Business with Attorney Aiden Durham
[0]
hi everyone I'm attorney aid in Durham
[2]
with 180 la Co in Denver Colorado and
[5]
welcome back to all up in your business
[8]
[Music]
[17]
in this episode of all up in your
[19]
business I'm going to talk to you about
[21]
what you should do if you receive a loan
[23]
under the Paycheck protection program
[25]
but before we get into it please be sure
[28]
to LIKE subscribe and share and check
[31]
the description for some additional
[33]
resources and a link to download my free
[35]
guide on how to pay yourself in a
[38]
single-member LLC so as I'm sure you're
[40]
all aware we're in the midst of the
[43]
coronavirus Kovan 19 pandemic and a big
[47]
part of this has been the stimulus
[50]
checks and other loans and grants
[53]
available under the cares Act which was
[56]
recently enacted to help the economy
[58]
through this pandemic and a part of that
[61]
was this paycheck protection program
[65]
which allowed for employers and business
[68]
owners and entrepreneurs solopreneurs
[71]
freelancers all types of businesses to
[74]
apply for a potentially forgivable loan
[78]
to help supplement the income that
[81]
they're missing due to the pandemic so
[83]
they can keep their employees on board
[85]
continue to pay payroll all of that now
[89]
there was a big issue a few weeks into
[91]
this because the funds that were
[94]
allocated for these loans were used
[96]
really quickly everyone started applying
[100]
for these loans really fast and the
[103]
money ran out eventually they did a
[106]
second round of funding for it and they
[109]
you know got more money available for it
[111]
as of the day that I film this I believe
[114]
that there are still funds available for
[117]
the paycheck protection program so if
[119]
you're interested in it or if you're
[122]
still struggling and you haven't yet
[123]
applied it's not necessarily too late so
[127]
check with banks and see if you can
[129]
still apply to try to get that money if
[132]
you're in need of it but for all of
[134]
those who have received a loan under the
[137]
Paycheck protection program what do you
[140]
do once you've gotten it it's not a loan
[143]
that you can just use for whatever
[146]
expenses you need to part of this in
[149]
order to have the Paycheck protection
[151]
loan forgiven it has to be used in a
[155]
specific way and primarily for payroll
[158]
purposes so as long as 75% or more of
[162]
that loan is used for payroll costs and
[166]
payroll expenses then that loan amount
[169]
can be forgiven if more than 25% of the
[173]
loan isn't used four-page payroll or you
[176]
know those related expenses then it may
[179]
not be eligible for full forgiveness so
[182]
if you are concerned about what steps
[185]
you need to take what things you need to
[187]
do to make sure you can get forgiveness
[189]
on that loan I'm gonna tell you what to
[192]
do right now so the very first thing you
[194]
need to do if you have received funds
[197]
under the Paycheck protection program is
[199]
set those funds aside in a separate
[202]
account whether you need to open a new
[204]
account or use an existing checking or
[208]
savings account put that money in its
[210]
own separate account dedicated solely
[213]
for those loan proceeds the purpose for
[216]
this is so you can easily trace how the
[219]
money is going to be used because when
[221]
we're applying for forgiveness that's
[223]
gonna be a big element of it is we're
[225]
gonna have to show how the money was
[227]
used how it was used for payroll
[229]
expenses and we're gonna need to keep
[231]
very close track of that so I will tell
[234]
you guys exactly what I did I did apply
[237]
for the Paycheck protection program
[239]
because I have an employee I want to
[241]
make sure I can continue to pay her over
[243]
the next few weeks while all this goes
[245]
on thankfully I did receive the loan a
[248]
couple of weeks ago immediately as soon
[251]
as I received it I transferred it to an
[254]
extra account that I have set up for
[257]
other purposes but I didn't need it for
[260]
that purpose specifically so I emptied
[263]
it and transferred the entire balance of
[265]
that loan into that account and then as
[267]
payroll expenses come up as those things
[270]
are paid you just transfer funds from
[273]
that holding account into the operating
[277]
account where
[277]
ever those expenses are gonna come out
[279]
of so whatever account your payroll
[281]
comes out of just transfer the money
[284]
from your loan account to your operating
[287]
account to cover those expenses what I
[290]
am doing in addition to this so I have
[292]
my dedicated account and I'm
[294]
transferring only for expenses that I
[297]
know are covered under the PPP and so
[299]
that in itself is giving me a pretty
[302]
easy way to track what I'm using those
[305]
funds for but in addition to that just
[307]
to be on the safe side I'm also keeping
[309]
a spreadsheet a really simple Excel
[312]
spreadsheet of when I transfer money and
[315]
for what purpose so if I have to
[318]
transfer it to cover a paycheck I put
[321]
that on the Excel spreadsheet the amount
[322]
I transferred the date and for what and
[325]
so that way just in case something
[327]
happens with my bank records I don't
[329]
know I have some additional tracking and
[332]
another spreadsheet that will help me
[334]
remember oh yeah that's why I used these
[337]
funds or that's why I transferred this
[338]
amount on this day so as I mentioned 75%
[342]
or more of the loan has to be used for
[345]
payroll expenses in order for the loan
[348]
to be eligible to be forgiven and so of
[351]
course along with tracking what money
[354]
you're using from the loan you also of
[358]
course want to track your payroll costs
[360]
and your payroll expenses and everything
[363]
that goes into that and payroll costs
[366]
the things that you can consider in
[368]
these payroll costs for using the loan
[371]
that's going into include gross wages so
[376]
you know the full amount that you're
[378]
paying your people your employees it
[380]
also includes commissions it also
[383]
includes any taxes that are withheld or
[386]
otherwise deducted from the employees
[389]
paycheck however it does not include the
[392]
employers portion of Social Security or
[395]
Medicare payments so those portions of
[400]
payroll costs the part the employer pays
[404]
towards Social Security or Medicare
[406]
those parts are not
[408]
included in that gross payroll amount
[411]
that is counted towards the PPP
[413]
forgiveness so of course you want to
[416]
keep paperwork and Records with regard
[419]
to your payroll and any tax filings any
[423]
tax payments for the payroll so you can
[426]
keep track of all those numbers and have
[428]
all that documented adequately payroll
[430]
costs can also include group health
[433]
insurance payments or retirement
[436]
contributions and then like I said any
[439]
state or local taxes that are applied as
[442]
well pretty much everything except for
[445]
the employers portion of that Social
[447]
Security and Medicare payments as far as
[449]
that other 25% goes if you don't need to
[453]
use a hundred percent of the loan on
[455]
payroll you can use up to twenty-five
[458]
percent of it on other expenses too you
[461]
can use it to pay rent on lease as long
[465]
as the lease was in place before
[467]
February 15 2020 so if you lease your
[471]
office you can use 25 up to 25% of the
[475]
PPP funds to pay that rent utilities as
[478]
well any office utilities this includes
[481]
icy electricity cable internet telephone
[485]
again as long as those services were
[489]
there was a contract for them prior to
[491]
February 15th so if you started a
[495]
business and started incurring all these
[497]
expenses after February 15th then you're
[501]
probably not going to be able to use
[502]
those funds in a forgivable manner to
[505]
pay those expenses they have to already
[507]
have been established prior to February
[509]
15 and then an important thing to keep
[512]
in mind is that these expenses that you
[515]
can use that 25% towards that does not
[518]
include cell phone or home office
[521]
expenses unfortunately so if you have a
[524]
home office you can't use the PPP to pay
[528]
rent for your home office or your cell
[532]
phones or any other home office expenses
[535]
so again with regard to any of those
[538]
whether it's payroll expenses or
[541]
non-payroll expenses of course keep
[544]
perfect track of every single penny that
[548]
comes out of that loan account and
[550]
exactly where every single penny went
[553]
honestly the more documentation the
[557]
better
[557]
you can't keep too much track for
[560]
purposes of the PPP forgiveness be as
[564]
overly diligent as possible with keeping
[567]
track of where every single penny of
[569]
that loan goes so again as I mentioned
[572]
the second you get that money the second
[575]
you receive that loan put it aside in
[578]
its own separate account and then
[581]
transfer those funds only for dedicated
[584]
expenses like payroll or the other non
[587]
payroll expenses up to 25% transfer only
[591]
for those purposes and then obviously
[593]
keep perfect track of every expense
[596]
every bill that you're being that you're
[598]
paying with the loan every payroll check
[601]
that you're paying every penny that's
[603]
used keep track of it and keep copies of
[606]
every document that you have regarding
[608]
those one thing I forgot to mention also
[611]
which is really important is these funds
[613]
have to be used within eight weeks from
[615]
the date you get them so you can't just
[618]
sit on this money for you know six
[621]
months or a year you have to use them
[623]
over the following eight weeks after you
[626]
receive them so keep that part in mind
[628]
too you need to you know get rid of
[631]
these and use them relatively quickly
[633]
that's all for this episode folks drop a
[636]
comment below and let me know what you
[638]
think again don't forget to Like
[641]
subscribe and share and check the
[643]
description for additional information
[645]
like I mentioned if you are still
[648]
struggling due to Kovan 19 in this whole
[651]
situation
[652]
if you're a self-employed or a
[655]
freelancer independent contractor
[658]
business owner or whatever the word you
[660]
want to use if you're struggling and you
[662]
haven't yet applied for the Paycheck
[665]
protection program I don't believe it's
[667]
too late I think there are some funds
[669]
still available for it so apply if you
[672]
need it
[673]
you know there's no harm in trying for
[675]
it at least thank you all so much for
[678]
watching I'm Aiden Durham and I'll see
[680]
you next time
[683]
[Music]
[685]
[Applause]
[686]
[Music]
[689]
[Applause]
[693]
[Music]
Most Recent Videos:
You can go back to the homepage right here: Homepage