Paycheck Protection Program

Many small business owners have applied for Paycheck Protection Program loans, created under the CARES Act, as an incentive for employers to maintain payroll during the COVID-19 pandemic. The program was recently expanded to include second draw loans, and for companies who did not receive a first draw loan to apply now.

The new rules are complex, and could require significant coordination among affiliated businesses. In addition, businesses are not precluded from the employer retention credit by having a payroll protection program loan, so there could be an opportunity to coordinate expenses to take advantage of both programs if a business qualifies.

“What is the incentive?” you may be asking.

If you meet certain requirements under the program, up to 100% of the loan proceeds may be forgiven. Notably, the SBA will fully forgive all loans under the Paycheck Protection Program, provided that all borrower requirements and documentation are met.

Marcum can assist you in calculating your average monthly payroll for the loan application as well as compliance with the requirements of the loan forgiveness program. We offer interim and final field work assistance to maximize the amount of the loan forgiveness.

Eligible Expenses

Payroll costs
Group healthcare benefits (including insurance premiums) and retirement benefits
Paid sick, medical, or family leave where no tax credits were taken (not those under FFCRA)
Employees’ salaries, commissions, or similar compensation
Payments of interest on any mortgage obligations (not including prepayment fees or payment of principal on the mortgage itself) in place as of February 15, 2020
Rent (including rents under a lease agreement) in place as of February 15, 2020
Utilities
New covered costs – business software / cloud applications, property damage, supplier costs, and worker protection costs. Payments to independent contractors for these are eligible.

Ineligible Expenses

Accounts payable, including payments made to proprietorships and independent contractors
Principal portions of mortgage or other debt payments
Payments of interest on other debt obligations established after February 15, 2020
Payments to independent contractors for services that are not part of the new covered costs
Any other costs not in the first column

Considerations and How Marcum Can Help

Work with you to develop a plan to maximize the forgivable amount of your PPP loan within your covered period.
Track and analyze payroll and non-payroll expenditures within the covered period in order to make strategic business decisions related to employee levels.
Accumulate and organize electronic supporting documentation for funding received and expenditures to support the forgiveness calculation, which can be provided to your lender.
Assess the impact of rehiring terminated employees on loan forgiveness and calculate the number of full time employees per pay period.
Evaluate the impact of reduced employee salaries on loan forgiveness.
Assist with interim and final field exams.
Provide tax planning and strategy consulting related to the CARES Act.
Provide additional guidance on other potential CARES Act funding.
Assess long-term business liquidity concerns or cash flow modeling.

Why Engage Marcum?

Having Marcum on your team will help protect your responsibility and create necessary proof of compliance with the terms of the Paycheck Protection Program Loan Forgiveness Plan.

How Can We Help?
Marcum will provide Interim and Final Field Exams to ensure requirements for PPP loan forgiveness provisions are met, which include:

At least 60% of the PPP loan proceeds must be used for payroll costs
Salary levels must be comparable to measurement periods before the covered forgiveness period
Loans are used to offset no more than eight weeks of eligible expenses

Who Should Take Advantage of these services?
Bankers & Borrowers

When to Qualify?
If you haven’t applied for the PPP loan, Marcum is here to assist throughout the entire process and we encourage engaging our team members at the onset of the loan application process.

If you have applied and were approved for the PPP loan, it is imperative to ask for assistance prior to receipt of the PPP funds to make sure a structure is in place to (a) properly account for the use of the funds and (b) to get the most amount of forgiveness available to you. Marcum can assist entities by providing guidance in documenting the use of funds, in order to mazimize accuracy and to make sure you are timely in your loan forgiveness documentation requirements.

Benefits to Banks

Compliance assistance
Assist with satisfying documentation requirements for PPP loans
Facilitate timely reporting necessary for the forgiveness of PPP loans
Value-added opportunity to enhance bank customer satisfaction
Documentation of the expected forgiveness amount, for lenders who wish to sell PPP loans to the SBA at the end of week 7 or the 8-week period

Benefits to Borrowers

Assist in calculating the maximum loan amount available
Upon receipt of the loan proceeds, assist in calculating and documenting eligible expenses during the 8-week period
Assist in calculating the average number of full-time equivalent employees during the applicable measurement and forgiveness period
Documentation to demonstrate the borrower has met its obligation to use at least 75% of the PPP loan proceeds for payroll costs
Program compliance assistance for borrowers using a PEO

How Marcum can help your financial institution

Co-branded private training sessions for your employees and customers to learn how to use the loan forgiveness calculator and explain the forgiveness rules.
Co-branded PPP loan forgiveness calculator (In Excel) for your clients. It will be updated as rules and regulations change and has locked calculations to maintain the integrity of the formulas.
Set up a private e-mail address for your customers to submit questions and our subject matter professionals will get back to them within 24 hours. If your customers need assistance beyond having questions answered, we can provide services to compute their loan forgiveness as a separate engagement.
Back-office assistance to process the loan forgiveness submissions and ensure the following 3 items are complete: loan forgiveness template, qualification checklist, and qualified expense documentation (per CARES Act).
Train your staff to process the forgiveness submissions in a consistent manner with our subject matter professionals being available for questions along the way.
If your staff is verifying the borrower’s forgiveness calculation, documentation and forms, Marcum can audit a percentage of those to verify your staff’s assessment is consistent and accurate.
Marcum will review an agreed upon percentage of the loan forgiveness applications after your staff has completed their review. We will review the application forgiveness calculation, documentation and forms to assess if your staff is consistent and accurate in their assessment.

business people sitting at table with charts

Coronavirus Resource Center

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