Pest Management Professional (PMP) magazine financial columnist Dan Gordon, CPA, PCO Bookkeepers, is once again teaming up with Triangle Pest Control owner and Coalmarch CEO Donnie Shelton to co-host a webinar on the latest round of Congressional changes to the Paycheck Protection Program (PPP). On Tuesday, June 9, at 1 p.m. Eastern, the pair will explore in a free webinar what the Paycheck Protection Program Flexibility Act of 2020 (PPPFA), which passed June 3 unanimously in the U.S. Senate and at press time was expected to be signed by President Donald Trump, means for the pest management industry.
According to a news release from Gordon, industry takeaways include:
- The 56-day (eight-week) period you had to spend your loan proceeds to obtain forgiveness will be extended to the earlier of 24 weeks or Dec. 31, 2020. However, you may elect to retain the eight weeks as your covered period. Just appreciate that using the 24 weeks vs. the eight weeks may not always be the best alternative, so you still need to run the numbers.
- The new law would allow you, as the borrower, to use at least 60 percent of the loan proceeds on payroll-related costs. Up to 40 percent of the proceeds may be used for the other qualified costs (rent, utilities, mortgage interest, etc.). This change overrides the previous requirement that at least 75 percent of the loan proceeds are to be used for payroll-related costs. However, our understanding is this means that no forgiveness will occur if less than 60 percent of the loan is used for payroll related costs.
- The safe harbor time period to rehire or replace employees back to the Full-Time Equivalent (FTE) numbers you had at Feb. 15, 2020, was no later than June 30, 2020, to avoid reduction in loan forgiveness. This will be extended to no later than Dec. 31, 2020. Our understanding is that this also means if you elect to use the eight-week period, the safe harbor for rehires remains June 30, 2020.
- You now have five years to repay the loan (if it’s not fully forgiven) instead of two years. The interest rate would still be 1 percent.
- The period to apply for a PPP loan is extended to Dec. 31, 2020, from June 30, 2020.
- The law would allow those businesses and self-employed individuals that took a PPP loan to also delay payment of their payroll taxes. This was prohibited under the CARES Act.
Pest management professionals who are interested can sign up to attend the June 9 webinar on PPP updates.