Paycheck Protection Program (PPP) Webinar Q&A

Questions

Can a LLC with no employees can request a loan (potentially forgivable) similar to the PPP for companies with employees?


Yes, you can




What’s the program for an LLC with no employees? I also made a mistake in applying for the $10k advance with one bank and the main loan with another since my bank wasn't ready at the time. Should I cancel the advance request and go through the same bank?


You can apply to the EIDL as well as PPP. You can watch our EIDL webinar at www.xqcpahouston.com/covid19




We’re continuing to pay our employees to be at home, do we need to continue paying them at least 75% of their avg. compensation, including tips, in order for our loan to be forgiven?


PPP covers FTE & PTEs. For PTEs, you will need to look at how many hours they have worked in the past 12 months




Can the funds ONLY be used for payroll for the 4 pay periods (ie. 8 weeks) after the loan origination date to be forgiven? Or, can utilize the funds for payroll for any previous pay periods (ie. the ones before we were applying to apply or receive funds from the loan) and still be forgivable?


In the CARES Act pg. 41, it mentions about when you apply for forgiveness, prove your evidence through the 8 week cover period which is February to June 30th.




Do payments to 1099 contractors count towards payroll?


No




I have 6 independent contractors. Can I consider them as employees to add to the amount of loan?


No




What happens if the money is used solely for payroll (if you're self-employed and don't have a building/rent/utility cost)?


This is fine




Does the slide say that only interest is forgivable? Is this true? We would still need to pay back principal?


We’re referring to a loan repayment (i.e. equipment loan), not the PPP loan.




If Wells Fargo is your business bank, can you apply with your personal bank to see if they're participating and can help?


Please apply where your business account is located.




Can we use some of the proceeds towards general liability insurance and workers' company premiums?


Yes, absolutely




My bank told me to reapply for EIDL 90 days after completing the first one.


That is completely fine, what your bank is asking you to do is to apply for the $10K emergency fund.




Do you need to maintain the exact number of employees? Or can it be amount towards payroll if you transition some part-time to full-time?


As long you’re maintaining the same average of employees that should be fine.




Does the time start ticking when you receive funds or from application date?


The forgiven cover period is anywhere from February to June 30th, according to the guideline.




Supporting Documentation?


Only one is required as proof but you may upload additional documents. Business tax return and any payroll reports like 941 or W3 for 2019.




Because our shop is closed, we only have minimal shifts for employees. We are continuing to pay them a portion of their hours, even though they’re not working in the shop. We’re not laying off, but they are working far fewer hours. How do we calculate FTE’s or PTE’s to show that we haven’t laid anyone off?


To calculate it, you must take your 2019 W2 reports and look at how many employees you have. It depends whether if PTEs are on 20 or 30 hours. When you ask for forgiveness, it will be 75% of your actual payroll cost.




Can we use the funds to hire new employees?


Yes, it is fine as long you’re able to prove that you maintained an average number of employees.




What if you receive a draw and not a salary?


That’s perfectly fine, if you’re a schedule C or a single member LLC, you still technically your draw is actually your payroll.