General Inquiries

PPP Loan Forgiveness App Calculations

  • 1.  PPP Loan Forgiveness App Calculations

    Posted 09-23-2020 16:51
    When completing my loan forgiveness application 3580EZ, I am using the 24 week alternative period but I used all funds within 10 weeks. So do I include on line 1 "Payroll Costs" the total for 24 even though I used all the fund in 10 weeks?

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    Brandi Stefanski
    VP Secretary/Treasurer
    Welch HVAC, Inc.
    Lewisville TX
    (214) 222-8600
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  • 2.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-24-2020 06:55
    No, you do not need to use the entire 24 weeks.  Once you get to your loan amount (or slightly higher) using documented payroll costs, you are done.  Keep it simple insomuch as make sure your reporting matches the amount you have submitted for the bank to easily verify.  Again, Line 1 can be more than the loan amount.  We are telling all of our PPP clients to ONLY use payroll and use the 24 week period to get there, which makes the entire forgiveness process much easier (if that's even possible ...).​

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
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  • 3.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-24-2020 09:45

    Thank you Marc. My supporting payroll documents I have are earning registers and ER contribution registers. Do you think banks will want anything different than these?

     

     

    "Welch HVAC, Inc. is a full-service mechanical company focused solely on K-12 school work in the DFW area. Our mission is to develop long term relationships with school districts and general contractors through honesty, fair pricing, high quality work and quick response times. It is our goal to be the best HVAC contractor in K-12 school work in the DFW area".

     

    Brandi Stefanski

    Vice President – Secretary/Treasurer

    Welch HVAC, Inc.

    118 Lynn Ave. Suite 602

    Lewisville, TX 75057

    Direct: (214) 222-8601

    Cell:      (817) 239-9539

    www.welchhvac.com

     

     






  • 4.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-24-2020 11:26
    We are being told that 3rd party reporting is ideal (i.e. ADP, CPAs, etc.).  If you process your own payroll, then anything you can provide from your GL/payroll systems, 941 returns, bank statements, etc.  That said, 2 things to keep in mind:  1) banks will not be consistent in this process so reach out to your bank to see what they want/need.  2) We were told yesterday that the SBA has a 35MB limit on uploads per client, so keep your attachments as succinct and "skinny" (compressed) as possible.​

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
    ------------------------------



  • 5.  RE: PPP Loan Forgiveness App Calculations

    Posted 10-12-2020 15:44
    Regarding the documentation, the SBA and our bank requests bank statements or 3rd party payroll service reports.  We process payroll in-house so I only have in-house payroll reports.  Our bank statements are not going to match gross pay.  I submitted our forgiveness application and uploaded our bank statements and they have come back and said our documentation does not support the amount of cash compensation reported on our application.  How do they expect to match net pay on the bank statement with the Gross Pay on our forgiveness application?

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    Barbara Kuntz
    Office Manager
    Associated Construction Inc.
    Spokane WA
    (509) 489-0563
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  • 6.  RE: PPP Loan Forgiveness App Calculations

    Posted 10-13-2020 08:23
    We are in a similar situation. What I did was to create queries that exported PR data to Excel that shows Gross, Deductions, Taxes, and Net, from that I tied the Net to the Bank Statements, the gross to the PPP Payroll expenses which reconciled to the 941's to close the circle. I haven't heard anything back from the bank but have my fingers crossed.

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    Frank Clark CPA, CCIFP
    Controller
    Engelberth Construction Company, Inc.
    Colchester VT
    (802) 846-2315
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  • 7.  RE: PPP Loan Forgiveness App Calculations

    Posted 10-16-2020 16:34
    Just beginning to process my first few PPP forgiveness applications and my sense of this process is it will be very inconsistent from bank to bank and messy just like the loan application and funding stages were.  That said, when I'm receiving 3rd party reporting that is either not detailed enough or    too voluminous, I've asked clients to provide additional support like manual reconciliations (i.e. in Excel) to get me to the numbers submitted on the applications and that appears to be working.  My suggestion would be to reach out to your bank directly and get some direction and hopefully they will work with you.   They will need some education on what payroll providers are "actually" able to provide vs. what we all think they should be able to produce.  Again I think you'll see this effort all over the board unfortunately (not to mention sensitive to loan size, i.e. loans >$2M are clearly going to require much more documentation than the smaller loans).  Ugh on all of this ...

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
    ------------------------------



  • 8.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-24-2020 10:06

    I will be interested to hear feedback on this as I have heard two different schools of thought.   The application does ask for your expenses for the covered period and does not specify a maximum of the loan amount.

     

     

    Ledna Jackson  , CB                                                                        

    Internal Operations, EHS Director

    "SAFETY?  I WILL LEAD THE WAY"

     

     

     

    Del-Air Mechanical Contractors, Inc.

    135 Chickamauga Ave.

    Knoxville, TN 37917

    P-865-525-4119 F-865-521-7043

    www.delairmechanical.com

     






  • 9.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-30-2020 11:51
    I am confused on a major/basic part, and haven't seen a definitive answer in this discussion, or elsewhere.

    If you meet the expenses prior to the covered period ending, can you report expenses higher than loan amount and have that make up any reduction from FTE?
    Prior to this discussion, I understood that you can only report up to the amount of the loan.

    Example: $500K PPP loan
    $500K of payroll at 12 weeks, FTE .8
    AND
    $750K of payroll at 16 weeks, FTE .8

    Can you report $750K payroll (& other qualified expense), reduce by .8 FTE (total $600K forgivable) and get 100% of $500K loan forgiven?

    OR:
    Are you restricted to reporting $500K in forgivable expense, and reducing it by .8 FTE, for a total of $400K forgiveness?


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    Laurel Cripe
    Vanport Marine Inc.
    Port Angeles WA
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  • 10.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-30-2020 14:29
    Laurel,
    It appears from the application we are able to report cost higher than the loan, but the loan forgiveness is limited to the loan amount.  I am using the long form, 3245-0407.  My Schedule A, line 10 is higher than the loan amount.  I have a small FTE percentage reduction, but the result is still higher than the loan amount.  On the application itself, the forgiveness is limited to the smaller of the loan amount, the modified payroll and non payroll costs (even though we only used payroll) and payroll costs on line one divided by 75%.

    I hope this helps.
    If I misspoke - my hope is an expert in this area corrects me.  I do not want to spread errors.
    Best of luck.

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    Joseph Harper CPA, CCIFP
    CFO
    Greater Dayton Construction Group
    Beavercreek OH
    (740) 607-1449
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  • 11.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-24-2020 12:25
    I have a similar question on the long form. I am trying to prepare the application while waiting for KeyBank to make their forgiveness portal available.

    Multiple webinar experts have confirmed that companies can apply for forgiveness before the 24 week period is up, but on the application instructions (OMB Control Number 3245-0407) from the US Treasury website, it indicates a covered period of either "(1) the 24 week - 168  day period...." or (2) ....eight - week (56 day) Covered Period".

    It seems to me that according to the form instructions, I need to wait for the 24 week period completion, and submit 24 weeks of payroll, rather than submit the 12 week numbers that used up our funds.

    Does anyone have any guidance straight from a lender on how to fill out the application, and particularly schedule A,  for a period between 8 and 24 weeks?

    Related question: Our KeyBank contact is not being responsive.  Has anyone seen an update on their portal roll-out?

    Thank you.

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    Laurel Cripe
    Controller
    Vanport Marine Inc.
    Port Angeles WA
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  • 12.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-25-2020 07:14
    We are using the long form as well and my understanding is that even though we spent the money (all PR and related items) in 11 weeks, when we chose the 24 week period, we have to report our FTEs as of the end of the 24 week period to determine the amount of forgiveness.  In our case, this means we have to wait until October 15 to apply (end of 24 week period).  What is confusing is that the form does seam to allow you to apply prior to that.  However, we would still need to provide the FTEs as of the end of the 24 week period.  Therefore, we're waiting until after the end of the 24 week period and hopefully more guidance is issued by the SBA.

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    Jason Strange CPA
    Chief Financial Officer
    Buzick Construction Inc
    Bardstown KY
    (502) 350-9254
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  • 13.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-25-2020 08:13
    Just following up on this. It's my understanding that you have 10 months from when your PPP period is over to submit the application for forgiveness. The total "forgivable" amount is determined in the first 24 weeks however your application for forgiveness can include FTE counts up to 12/31/20. Based on this, it may or may not be in your best interest to submit your application "early" if you haven't met your FTE goal.

    Is this what others understand to be the case?

    Thanks,

    Alex

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    Alexander Spiezio
    Mid-Atlantic Mechanical
    Perrineville NJ
    (732) 521-2150
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  • 14.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-25-2020 11:37
    Yes the long form is more complicated and I forgot about the FTE test, yes that's adds some wrinkles in there, hopefully most companies can "earn" their way out of any potential FTE "penalties" to the extent there are any.  And that's why you all are the experts, we are just the order takers here lol ...​

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
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  • 15.  RE: PPP Loan Forgiveness App Calculations

    Posted 10-02-2020 10:03
    I attended a webinar early this week where the discussed filing for forgiveness early.  What they said was that you could elect the 24 weeks and file early, but that you'd then prorate your FTEs and/or salary reductions over the 24 weeks based on the number of weeks you're actually using.

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    Diana Strassmaier CCIFP, CPA
    Director
    Aldrich CPAs + Advisors, LLP
    Portland OR
    (503) 716-9352
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  • 16.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-29-2020 11:34
    Jason,

    We are in a similar set of circumstances.  We qualify for forgiveness solely on payroll, earlier than the full 24 weeks.  I have the long form application completed in pencil showing 100% forgiveness of the PPP loan.  We have held the application for a period, not submitted.  I calculated the FTE change from the loan date to the end of the forgiveness period used.  I believe I will need to recalculate the FTE change, carrying the calculation to the end of the 24 week period.  Unless I am missing a meteor, if our count drops a bit, the loss of forgiveness will be more than made up with added payroll.   If I did not use the full 24 weeks payroll previously, and have the ability to do so now, I will increase the eligible payroll so that a drop in the factor will not negatively affect the forgiveness.

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    Joseph Harper CPA, CCIFP
    CFO
    Greater Dayton Construction Group
    Beavercreek OH
    (740) 607-1449
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  • 17.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-29-2020 11:39
    This is exactly the "ideal" scenario that we as bankers are hoping for, thanks for sharing.​

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
    ------------------------------



  • 18.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-29-2020 11:46
    I may be missing something here. If the 24 week period is over but we haven't met our FTE number...don't we have until 12/30/20 to hit the FTE count? For example, If we submit at week 24 we would have 65% forgiveness; if 11/30/20 85%, if 12/30/20 100%,

    FTE Safe Harbor calculations:
    • FTEs as of February 15, 2020 (based on the pay period including this date)
    • Average FTEs during the period 2/15/20 to 4/26/20
    • Number of FTEs as of the earlier of the submission date of loan forgiveness application or December 31, 2020

    Basically, I am trying to confirm the understanding that while the PPP forgiveness period may be over, the application does not have to go in until such time that it is beneficial with respect to the FTE count.

    Thanks,

    Alex

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    Alexander Spiezio
    Mid-Atlantic Mechanical
    Perrineville NJ
    (732) 521-2150
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  • 19.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-29-2020 13:03
    Below is the link to EZ forgiveness application instructions, which includes the checklist for when you can use it, specifically noting that the FTE calculation is avoided altogether if you can go this route.

    It is further my understanding that if you do have to use the long form (3508) and you have FTE reductions,the Safe Harbor rules simply require you to rehire or replace employees (i.e. FTE count) by the end of the year to qualify.  In either case and if you did not have an FTE reduction, I am being told you don't have to wait until the end of the year / covered period to apply, again per the recent Safe Harbor rules.

    https://www.sba.gov/document/sba-form-paycheck-protection-program-ez-loan-forgiveness-application-instructions-borrowers

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    Marc Hendrikson CPA, CCIFP, CGMA
    Senior Vice President, Contractor & Commercial Banking
    Sunflower Bank
    Broomfield CO
    (303) 831-6735
    marc.hendrikson@sunflowerbank.com
    ------------------------------



  • 20.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-30-2020 11:34
    Joseph,

    Not speaking directly to the SBA application or the related guidance, but instead only to our bank's application process and related documents as we see it so far (not fully complete yet) - our FTEs are only being measured during our covered period or the period over which we used the funds.  We expected it to be completed as you have noted, but found their application to not allow a difference in the covered period and FTE measurement dates (originally thought to be up to the application date); we also double checked that with the bank and they confirmed FTEs are only to be measured over the covered period.

    I hope this helps.

    Thanks,

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    Owen Wyss CPA
    Chief Financial Officer
    Thompson Concrete
    Carroll OH
    (740) 756-7256
    owenw@thompsonconcrete.com
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  • 21.  RE: PPP Loan Forgiveness App Calculations

    Posted 09-25-2020 08:34

    Laurel:

    Hope this helps

    Information from the Interim Final Rules  (6/22/20)

    "A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness"



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    Steve Tenney
    BerganKDV
    Des Moines, IA
    (515) 697-4546
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