Final PPP Statistics: As many of you know the PPP loan program is officially closed, it is certainly possible that it can be extended via the next stimulus bill, however that has been delayed and it is unclear what changes to the PPP (if any) will come as a result of the bill and when. The SBA has been consistently publishing PPP loan statistics, and this link provides what is effectively the “final” results as we know them. Some general observations:
- $133 billion of funds allocated to the program went unused.
- NY, CA and TX were the largest recipients of loans.
- Over 87% of the total loans issued were below $150k.
- Chase, BOA and PNC were the top three lenders (by dollars).
- Healthcare, professional services and tech were the top three beneficiaries (by dollars).
New Clarifications/FAQs on How to Calculate Forgiveness: The SBA released new FAQs recently, Withum has written an in-depth analysis on each one within this article. The FAQs do not present major shifts in how we view the mechanics of forgiveness but do help provide further detail and clarity on topics such as how to calculate the maximum forgivable salary for owner/employees based on entity type (LLC, S-Corp, C-Corp and how to account for benefits paid within and outside of the covered period among other topics. As borrowers begin working on their applications, understanding these nuances is important.
PPP and M&A: Withum often gets questions regarding how the sale or a business or the acquisition of another entity may impact a borrowers PPP loan and ability to obtain forgiveness. Withum has put together an article addressing some of the complexity that may arise from these transactions, as well as how they impact the employee retention tax credit.
Reminder Section: (what should I be doing):
- Talk to your payroll company about claiming the employer payroll tax deferral and employee retention credits (ERC) that were made available in the CARES Act.
- Talk to your payroll company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CARES Act).
- Consider speaking with your lender to discuss changes to terms of existing debt facilities.
- If you have already received a PPP loan, start forecasting how you intend to spend the funds and how you can qualify for the highest amount of loan forgiveness possible. If you are not forecasting 100% loan forgiveness, then most likely you should seek assistance regarding your particular situation. Withum believes the vast majority of borrowers should expect and plan to receive 100% loan forgiveness.