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PPP and Furloughed employees

benbloisebenbloise ownerUnconfirmed, Member

If I bring my furloughed employees back to full time, at the same pay level in June (we are a preschool and are only open to essential business workers, everyone else is in a "shelter in place order") and don't apply for the PPP money until June, will I have 8 weeks to use the "grant" money when I receive it or does all the "grant" money need to be spent before the end of June?

I would imagine this would be for a lot of companies.....if we are ordered to shelter in place, its going to hard to return all employees (some might be sick, scared, etc.).

Or is the government trying to push us to pay them even if they can't work for the time being

Also, if I bring everyone back, and have to furlough them again because of a second waive of the Coronavirus, or lack of demand, will I be penalized?

Thanks
Ben

Answers

  • Brian_SBMBrian_SBM Vice President, Entrepreneurship Administrator admin

    @benbloise Good question. Our understanding of the legislation is that you have 8 weeks from when you accept the loan to make all eligible expenditures, even if that extends past 6/30. If you don't make all eligible expenditures over those 8 weeks, any remaining amount would convert to a loan at 1% interest over 2 years, with 6 month deferral on first payment.

    There could be some things to consider: Will the government allocation for this program expire by June? The goal is to keep folks on payroll, but we do understand your situation and imagine it is the same for many others.

  • benbloisebenbloise owner Unconfirmed, Member

    Brian, I hope you realize how much impact you are having. Your presentation was really good. The fact you are replying to every scared person, like my self, individually shows what type of person you. Thank you!

  • posseriposseri Member
    I know that 75% of the money I receive under the PPP must be used for payroll. My question is can I use this money to pay an additional amount of money to employees for “hazard” pay to those that continue to work?
  • BoochNewsManBoochNewsMan Owner Member

    As the owner of a preschool, I would like to pay staff while the school is closed and they can do lesson prep at home as well as check-in with families remotely. All are currently furloughed but if PPP money comes through can I use this to pay them to work from home? What level of reimbursement would be permitted? A full 40 hrs a week worth?

  • Brian_SBMBrian_SBM Vice President, Entrepreneurship Administrator admin

    @BoochNewsMan Yes, this would be eligible use of PPP. You would calculate your max amount by taking a year's worth of payroll (including health, retirement and employer state/local tax payments) and dividing by 12 to get average monthly payroll. Then multiply that by 2.5. Any amount of that money that you spend over 8 weeks of receiving that loan would be forgiven entirely. So, it depends on what the bank ultimately qualifies you for, but it should cover about 10 weeks of full-time payroll.

  • Brian_SBMBrian_SBM Vice President, Entrepreneurship Administrator admin

    @posseri I believe that would be an eligible use, but check with your bank. If it's a payroll expense, it should be forgiven.

  • FSgraphicFSgraphic owner/operator Member

    I am a sole proprietor LLC company. My husband I produce product for the tourist industry. We hire a independent contractor to help with artwork we use for our product. my question is for payment to ourselves; We just transfer money from our business checking account to our personal checking account and visa account and we use the business checking to pay our commissioned artists. Can I just use my bank statements to come up with our payroll, insurance etc. and does property insurance count too?

  • Brian_SBMBrian_SBM Vice President, Entrepreneurship Administrator admin

    @FSgraphic It's unclear to us how eligibility for sole props will be calculated, especially those that just take draws. We hope to have more guidance this week in advance of the Friday launch for self-employed on PPP. Try to contact your bank and get the ball rolling.

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