If you have been approved for and/or received a loan under the paycheck protection program, you will need to make sure that you manage those funds correctly to qualify for forgiveness. This webinar will provide you with the following information: Forgiveness Terms Forgiveness Calculations Forgiveness Documentation Frequently Asked Questions

1. NYSBDC.org
Covid-19 Pandemic
Paycheck Protection Program
Managing and Reporting Funds for Forgiveness

2. NYSBDC.org
− Forgiveness Terms
− Forgiveness Calculations
− Forgiveness Documentation
− Frequently Asked Questions (FAQs)
What you need to know…

3. NYSBDC.org
− Lender Term Sheet
− Forgiveness terms may vary lender to lender.
− Refer to your lender term sheet for your specific requirements.
− Lenders are not negotiating forgiveness terms.
− You will be bound to perform based on the terms outlined by the lender.
Forgiveness Terms

4. NYSBDC.org
Some lender terms refer to the Act. In that case you should comply with the SBA guidelines.
− SBA Guidelines
− 75% of the total loan proceeds must be used on eligible payroll expenses.
− Gross wages, employer contributions to health care benefits, retirement programs, employer paid
state and local taxes)
− The employer will not reduce the pre-shutdown headcount by more than 25%.
− The employer will not reduce the average monthly payroll by more than 25%.
Forgiveness Terms

5. NYSBDC.org
− Performance Period
− Most lenders are requiring that the performance period begins on the day the
loan funds are disbursed.
− If it is vague, you should be prepared for the performance period to begin
within 1 week of the loan disbursement.
− You cannot wait until you re-open to utilize the funds and qualify for
forgiveness.
Forgiveness Terms

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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Forgiveness Calculations

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− We strongly recommend that you utilize a separated
account for managing the PPP funds.
− Acceptable Documentation
− Documentation requirements will vary lender to lender, check with your lender for
their specific requirements.
− SBA guidance (issued 4.14) identifies the following documentation for forgiveness:
− Form 941
− State quarterly unemployment insurance tax reporting forms
− Equivalent payroll processor records
− Evidence of payments for additional forgivable expenses
Forgiveness Documentation

17. NYSBDC.org
Question:
I have been paying my employees since
the shutdowns, can I use the PPP funds to
reimburse those payments to date?
Answer:
No, the PPP funds may only be used for
the performance period following the
disbursement of the loan.
Frequently Asked Questions (FAQs)
Question:
My employees are currently collecting
unemployment. What happens if I am
not able to get them to come back?
Answer:
You have two options…
1. You can replace them with new employees.
2. You can return the PPP funds and withdraw
from the program.
Head count and payroll are directly
related to the forgiveness terms. Failure
to perform will result in the loan not
being forgiven.

18. NYSBDC.org
Question:
Can I wait until I re-open to begin my
performance period?
Answer:
No, the PPP funds are required to be used
immediately following the loan
disbursement. If you are not currently
open, you will need to pay people to stay
at home until you re-open or return the
funds.
Frequently Asked Questions (FAQs)
Question:
Can I include independent contractors in
my payroll expense calculations?
Answer:
No, the gross payroll expenses can only
include people that are actively on your
payroll to qualify for forgiveness.

19. NYSBDC.org
Question:
Can I include the employer contribution to
social security and Medicare in the
eligible payroll expenses for forgiveness?
Answer:
No, only the employer contributions to
health care expenses, retirement benefits,
allowance for separation, leave
contributions and employer paid state
and local taxes on payroll.
Frequently Asked Questions (FAQs)
Question:
Can I pay for worker’s compensation,
disability insurance, and unemployment
insurance from the PPP funds and have
them qualify for forgiveness?
Answer:
You can pay for those expenses from the
PPP funds; however those expenses will
not be eligible for forgiveness.

20. NYSBDC.org
Question:
What if my additional forgivable expenses
do not total the .5 calculation of the loan
amount? Can I pay other business
expenses from those funds.
Answer:
You may pay other expenses from the PPP
funds; however those expenses will not be
forgiven.
Frequently Asked Questions (FAQs)
Question:
My lender documents are very vague,
how can I make sure that I make sure
that I have everything that I need to
maximize the forgiveness for the loan?
Answer:
There are several options, you can work
with any of the following that can assist
you with managing the PPP funds:
1. Your Lender
2. Small Business Development Center
3. Your Accountant
4. Your Attorney

21. NYSBDC.org
Question:
How do I account for my owner’s draw
payments?
Answer:
You will need to write the owner’s draw
check from the business account and
deposit it into a personal account.
Frequently Asked Questions (FAQs)
Question:
How do I calculate the amount of the
owner’s draw payment?
Answer:
You will have to refer to the amount that
was calculated in the PPP application and
pay yourself that amount.

22. For assistance:
Existing clients:
Please e-mail and/or call your advisor to
schedule an appointment. Emily Loughlin, Jen
Kilcoyne, Matt Hosek, Tom Reynolds, Walter
Burke.
New Clients:
Go to www.nysbdc.org, click on Make an
Appointment, and submit the form to have an
advisor assigned to assist you.