Many businesses hit by the pandemic have expressed their confusion with Paycheck Protection Program (PPP) benefits and guidelines, including loan forgiveness. Financial Advisor Magazine recently tapped MWE partner Paul Becht to shed light on some of the rules that are bewildering businesses.
The federal loan stimulus for small and midsize businesses—the Paycheck Protection Program (PPP)—offered the promise of benefits for businesses hit by the pandemic, including forgiveness loans. Now, if only business owners could decipher the rules.
Guidelines for forgiveness, updated endlessly by the U.S. Treasury Department and the U.S. Small Business Administration as Congress wrangles with deadlines and regs, continue to buffalo businesses that just want to know how to qualify for not repaying loans.
Originally, the PPP pledged to forgive loans if a borrowing company avoided layoffs and used three-quarters of the money for costs such as employee payroll, among other conditions. Borrowers swiftly began reporting that calculations and other details of forgiveness were bewildering.
“How to calculate full-time equivalent employees when they naturally work fewer hours during this time of year though are paid the same salary?” said Paul Becht, CPA and partner at Margolin, Winer & Evens in Uniondale, N.Y. “The guidance appears to penalize the employer for these situations, though the employees have not been economically impacted at all.” Read More>>