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Started By
Message
Those who received PPP funding
Posted on 4/17/20 at 2:44 pm
Posted on 4/17/20 at 2:44 pm
A lot of talk has gone into using the funds on payroll, but one piece you’re forgetting is your FTEs. You HAVE to maintain your FTEs or you’re going to get fricked on the forgiveness. Before anyone asks, FTE is not the same as a point in time headcount. Be careful out there baws.
5
Posted on 4/17/20 at 2:47 pm to JumpingTheShark
People are forgetting that piece?
Even if you remove the forgiveness and consider it to be a traditional loan, you're still getting funds at 1% interest.
Even if you remove the forgiveness and consider it to be a traditional loan, you're still getting funds at 1% interest.
Posted on 4/17/20 at 2:51 pm to JumpingTheShark
quote:
but one piece you’re forgetting is your FTEs
how would you know what we are forgetting or remembering?
quote:
Before anyone asks, FTE is not the same as a point in time headcount
its good we have you here
Posted on 4/17/20 at 2:52 pm to cgrand
I’m basing it on calls from clients I’m getting, they seem to think all they have to do is keep paying their payroll and that’s it. Smart arse.
Posted on 4/17/20 at 3:32 pm to JumpingTheShark
Serious question: When does the 8 week period for maintaining payroll levels and FTE begin ??
This post was edited on 4/20/20 at 6:49 pm
Posted on 4/17/20 at 3:33 pm to JohnWicksDawg
It starts the first day you receive any disbursement of the funds. So the day the funds hit your bank account.
Posted on 4/17/20 at 3:36 pm to Spock
^^^^^^
will wait for guidance from jumpingtheshark but I’m pretty sure the above is correct
will wait for guidance from jumpingtheshark but I’m pretty sure the above is correct
Posted on 4/17/20 at 3:38 pm to JumpingTheShark
I'm confused on how to calculate the FTEs during the 8-week period. I can easily calculate average FTEs for either of the comparison periods since they are all based on hours worked. But we are going to be paying alot of employees for staying at home. So are the FTEs at that point based on pay - so if a normal 40 hour employee (1.0 FTE) is getting paid 75% of their salary for not working at all is their FTE reduced to 0.75? Or do they maintain their old FTE status of 1.0 just because they weren't furloughed/fired?
Posted on 4/17/20 at 3:44 pm to JumpingTheShark
I’ve been under the understanding that it’s all prorated. For example:
You previously had 40 FTEs making $15.00 per hour on average.
You now have 35 FTEs making $15.00 per hour on average.
Ignoring the extra 0.5x of the formula used for Rent, Utilities and Mortgage Interest, your loan amount may have baked into it an assumption that payroll will be (40 FTEs x 40 hours per week x $15/hour x 8 weeks) = $198,000
However, your actual payroll will only end up being (35 FTEs x 40 hours per week x $15/hour x 8 weeks) = $168,000
Thus, $168,000 (plus pro rated interest) would be forgiven and $30,000 (plus pro rated interest) would be amortized over 2 years at 1.0%.
Is that not how you understand it?
You previously had 40 FTEs making $15.00 per hour on average.
You now have 35 FTEs making $15.00 per hour on average.
Ignoring the extra 0.5x of the formula used for Rent, Utilities and Mortgage Interest, your loan amount may have baked into it an assumption that payroll will be (40 FTEs x 40 hours per week x $15/hour x 8 weeks) = $198,000
However, your actual payroll will only end up being (35 FTEs x 40 hours per week x $15/hour x 8 weeks) = $168,000
Thus, $168,000 (plus pro rated interest) would be forgiven and $30,000 (plus pro rated interest) would be amortized over 2 years at 1.0%.
Is that not how you understand it?
Posted on 4/17/20 at 3:50 pm to RedStickBR
It is prorated down rather than an all or nothing type scenario, you’re correct.
Posted on 4/17/20 at 4:06 pm to JumpingTheShark
Ok, just making sure.
There is one additional issue that I haven’t seen clarified yet. The Act mentions 8 weeks, but is that a literal 8 weeks (i.e. only 56 days) or is that meant to be a full two months (365/12*2) = 61 days? If it’s only 56 days, and you pay payroll on the 1st and 15th, you could only have 3 periods covered as opposed to 4:
Assume funding occurs May 2nd, a day after you paid payroll on May 1st
May 15th payroll is covered, and
June 1st payroll is covered, and
June 15th payroll is covered, but
July 1st payroll is not covered as that is 60 days past May 2nd and 8 weeks is only 56 days
If 8 weeks is interpreted to be 2 full months, then that last payroll is covered
There is one additional issue that I haven’t seen clarified yet. The Act mentions 8 weeks, but is that a literal 8 weeks (i.e. only 56 days) or is that meant to be a full two months (365/12*2) = 61 days? If it’s only 56 days, and you pay payroll on the 1st and 15th, you could only have 3 periods covered as opposed to 4:
Assume funding occurs May 2nd, a day after you paid payroll on May 1st
May 15th payroll is covered, and
June 1st payroll is covered, and
June 15th payroll is covered, but
July 1st payroll is not covered as that is 60 days past May 2nd and 8 weeks is only 56 days
If 8 weeks is interpreted to be 2 full months, then that last payroll is covered
This post was edited on 4/17/20 at 4:07 pm
Posted on 4/17/20 at 4:07 pm to JohnWicksDawg
We considered it to be upon disbursement. We’ve already made a payroll with the funds. Now if I can just get my damned clients to pay. They’re sending me new business but I have a couple of large EFTs that are overdue. My operating account balance sucks right now.
ETA: Our payroll is on the 15th and last day of the month. Our four payrolls will fall well within an eight week period.
ETA: Our payroll is on the 15th and last day of the month. Our four payrolls will fall well within an eight week period.
This post was edited on 4/17/20 at 4:11 pm
Posted on 4/17/20 at 4:13 pm to JumpingTheShark
I have already had a few people just straight up admit they are going to stay on unemployment because they are going to be getting over 20 bucks an hour when you throw in the Federal 600 dollars
No way I can be at the same employment level but most of my couple hundred thousand is going to go right where it is supposed to go and can even use it to close out a loan we had for building upgrades which is a nice bonus
We will be paying my family as employees to make up the gap.
The 1% on the leftovers isnt really a big deal. I will eat the couple grand.
No way I can be at the same employment level but most of my couple hundred thousand is going to go right where it is supposed to go and can even use it to close out a loan we had for building upgrades which is a nice bonus
We will be paying my family as employees to make up the gap.
The 1% on the leftovers isnt really a big deal. I will eat the couple grand.
This post was edited on 4/17/20 at 4:15 pm
Posted on 4/17/20 at 4:15 pm to YF12
are you straight up lying or what?
Interest on the loan is an allowable use. Principle is not.
Putting family members on payroll is not an allowable use.
I hope you’re just being sarcastic. If not, you are a class A a-hole.
Interest on the loan is an allowable use. Principle is not.
Putting family members on payroll is not an allowable use.
I hope you’re just being sarcastic. If not, you are a class A a-hole.
This post was edited on 4/17/20 at 4:17 pm
Posted on 4/17/20 at 4:18 pm to VABuckeye
quote:
Interest on the loan is an allowable use. Principle is not.
I have about 60k in interest on a huge loan and if it is forgiven I will pay it off in full
quote:
Putting family members on payroll is not an allowable use.
It isnt
I am doing it anyways
Posted on 4/17/20 at 4:18 pm to RedStickBR
I just got a call from a client that asked me this.
They got their money on Monday, so 8 weeks began Monday.
He will have no problem getting everyone back from furlough and paying them for 8 weeks.
His 8 weeks runs out mid-June.
Guidance states you have to get everyone back by June 30th.
But his 8 weeks will run out a couple of weeks before June 30.
Can he pay them for 8 weeks, and then assuming business hasn't sufficiently rebounded enough to keep everyone, re-furlough people between that date and June 30?
I have no idea.
They got their money on Monday, so 8 weeks began Monday.
He will have no problem getting everyone back from furlough and paying them for 8 weeks.
His 8 weeks runs out mid-June.
Guidance states you have to get everyone back by June 30th.
But his 8 weeks will run out a couple of weeks before June 30.
Can he pay them for 8 weeks, and then assuming business hasn't sufficiently rebounded enough to keep everyone, re-furlough people between that date and June 30?
I have no idea.
Posted on 4/17/20 at 4:21 pm to YF12
Then frick you. There are businesses that didn’t get funded that desperately needed the money.
Posted on 4/17/20 at 4:23 pm to YF12
quote:
have already had a few people just straight up admit they are going to stay on unemployment because they are going to be getting over 20 bucks an hour when you throw in the Federal 600 dollars
No way I can be at the same employment level but most of my couple hundred thousand is going to go right where it is supposed to go and can even use it to close out a loan we had for building upgrades which is a nice bonus
We will be paying my family as employees to make up the gap.
The 1% on the leftovers isnt really a big deal. I will eat the couple grand.
Saved for the admission to fraud.
Posted on 4/17/20 at 4:24 pm to VABuckeye
quote:
Then frick you. There are businesses that didn’t get funded that desperately needed the money.
I could just fire 50 people instead
I have been floating them something for an entire month we have been closed
The amount of money I have paid in state unemployment and taxes over the last decades is obscene
I want it back. I want my dollars to work for me finally.
Dont feel even 1 ounce bad about it. Society is still way ahead of me on those dollars.
Call the local SS and report me. I am a CPA. I am gaming the frick out of this.
This post was edited on 4/17/20 at 4:25 pm
Posted on 4/17/20 at 4:36 pm to RedStickBR
quote:
The Act mentions 8 weeks, but is that a literal 8 weeks
We have the same question. We got funded on a bad day to make the 8 weeks work out well, so we're inquiring if it's possible to run a payroll early and hold the checks for a few days. Banks has not let us know because I don't think they've been told so from SBA.
We had a temp worker that was due to be hired, so we went ahead and hired him to give us a 1 person cushion in case something comes up in the next eight weeks and I have to let someone go.
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