Hi, Natalie here. There is wealth of information to clear up confusion about the new regulations regarding PPP loans. There will probably be changes, so this is summary is based on the best information currently available. Before you take action, I encourage you to check for updated rules and make sure you are fully informed before signing any paperwork.
As with any government program, there are a lot of details that need to be understood. So this may be spread out over two-to-three blogs, as my goal is to deliver this information in bite-sized chunks. For additional information, I suggest you contact your local Small Business Association (SBA).
Here’s a headline of the first section from an article in Forbes magazine:
“Second Draw PPP Loan Eligibility Requires that Borrower will have spent the “Full Amount” of the First Loan Before Receiving the Disbursement of the Second Loan”
The title for this Act is a mouthful of legalese, but the short title is the “Economic Aid Act”. This Act states that “a Second Draw PPP Loan may only be made to an eligible borrower that (1) has received a First Draw PPP Loan, and (2) has used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower.
Let’s break this down into simpler language.
You have to be eligible You have received the first PPP loan You will spend 100% of the first loan before collecting any of the funds from the second PPP loan Here is some clarification from the Interim Final Rules:
The borrower must have spent the full amount of its First Draw PPP Loan on eligible expenses under the PPP rules to be eligible for a Second Draw PPP Loan; and “The full amount” of the borrower’s First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act. This next topic is what the definition of “Gross Receipts” is. “Gross Receipts” Defined for Purposes of Determining Whether There Has Been a 25% Drop in Revenues to Qualify for Second Draw
Unfortunately, the Economic Aid Act does not include a general definition of “gross receipts” for purposes of determining a borrower’s revenue reduction.
Here is what is included in gross receipts: ““All revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.”
Here is what is not included in gross receipts:
“Taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees); Proceeds from transactions between a concern and its domestic or foreign affiliates; and Amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.” One additional statement regarding what may not be excluded from gross receipts has to do with contractor costs and other items under the category of “all other items”. These items include:
reimbursements for purchases a contractor makes at a customer's request investment income employee-based costs such as payroll taxes Lastly for part 1, this definition of gross receipts is consistent with SBA’s size regulation 13C.F.R. 121.104. This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.
I may be able to shed some additional light on these new rules, so contact me if you want to talk this over.
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Hello everyone, I am suggesting we have a thread with comments that only relate to information regarding help for businesses or communities affected by recent events.
I will start the thread by listing relevant links I have at this time:
the U.S. Treasury Department has released a draft application for the Paycheck Protection Program (the
new forgivable loan program) created by the CARES Act. The Paycheck Protection Plan application process starts
Friday, April 3, 2020 and those eligible and interested in applying should begin that process as soon as possible:
- For a top-line overview of the program:
https://home.treasury.gov/system/files/136/PPP -- Overview.pdf
- If you’re a borrower, more information and links to SBA lenders http://www.sba.gov/ can be found here:
- The application for borrowers can be found here:
Importantly as well, we have included links to Small Business Administration (SBA) resources that will help navigate
the government subsidies, loans and programs available:
- The SBA’s Local Assistance Page, https://www.sba.gov/local-assistance which provides local resources and
information on offices and other resources around the country;
- Lender-Match, https://www.sba.gov/funding-programs/loans the SBA’s tool to find local banks and lenders
based on your needs and;
- SBA’s Coronavirus Resource Page:
By Joe Marconi
As a result of COVID-19, we are seeing more and more businesses install plastic shields at their service and receptionist counters and desks. What are your thoughts. Will you install the shield, have done it or is it a no?
The leadership of National Pronto Association and Automotive Distribution Network announced today the merger of the two organizations. As of Jan. 1, 2021, the newly formed organization will be known as the Pronto Automotive Distribution Network.
Headquartered in Grapevine, Texas, Pronto Automotive Distribution Network will be led by Robert Roos as president and David Prater as executive vice president. The combined organization will represent more than 250 members in North America with an estimated revenue of approximately $5 billion annually. Members will continue to market under the Pronto, Parts Plus and Auto Pride names.
In addition, Pronto Automotive Distribution Network, together with Federated Auto Parts, will comprise the Automotive Parts Services Group (The Group).
“Pronto members and staff are excited to partner with the Network team. The similarities between our two groups are significant, making the transition into one company a much easier path,” said Roos. “This merger will benefit Network and Pronto members, as well as our valued vendor partners, by increasing our membership footprint throughout North America and helping to ensure our collective future viability. In addition, the merger will enhance our position within The Group, working alongside our partners at Federated. I can’t think of a better way to start off the new year.”
“By forming the Pronto Automotive Distribution Network, we will have the ability to build on past success, make a greater impact in the marketplace, and identify more ways to benefit our members, supplier partners and associates,” added Prater. “Because the aftermarket is always evolving, taking this proactive step and merging two of the major program groups will help ensure our combined membership is well positioned to compete and achieve mutual success well into the future.”
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By Joe Marconi
There is a proposed bill in Mississippi that would cap labor rates for collision shops. In my opinion, any bill that would regulate and/or dictate the maximum labor rate a shop can charge is s step in the wrong direction. In addition, as an industry we don't earn enough.
The Automotive Service Association (ASA) opposes this bill.
What are your thoughts on this?
Here's a link for more information: