The Law Offices of Eric J. Wexler, CPA
The Law Offices of Eric J. Wexler, CPA

Small Business Administration (SBA) Paycheck Protection Program (PPP) and Economic Injury Recovery Loan  (EIDL)

FEDERAL PROGRAMS

    -Paycheck Protection Program (PPP)

  • Loan amounts can be up to 250% of your average monthly payroll.
  • No collateral or personal guaranty is required.
  • Proceeds can be used for payroll, certain health benefits, interest on mortgage or rent payments, utilities, and other specified expenses.
  • Loans have a two-year term, that can be extended, with a maximum interest rate of 4% (currently 1%, As of April 3, 2020)
  • A portion or all of loan may be forgiven by the Small Business Administration and, therefore, would not have to be repaid if used for “forgivable expenses.”
  • APPLY THROUGH YOUR BANK (list of approved banks here)

    -Economic Injury Disaster Loan (EIDL)

  • Most small businesses are eligible to apply.
  • Credit history and ability to repay will be considered.
  • Must show economic injury due to coronavirus (COVID-19), not other factors.
  • These loans do not go through a lender; they come directly from SBA Disaster Assistance (http://disasterloan.sba.gov).
  • There is no cost to apply.
  • Eligible entities can borrow up to $2 million at interest rates of 3.75% for small businesses and 2.75% nonprofits; the rates are fixed for the full term of the loan.
  • Terms are up to 30 years, no prepayment penalty.
  • APPLY HERE

    -Employer Retention Credit

    -Employer Payroll Tax Deferral

 

MARYLAND PROGRAMS

    -Maryland Small Business COVID-19 Emergency Relief Grant Fund

  • up to $10,000,
  • Must have fewer than 50 Employees
  • Must have gross revenue of less than $5M

COUNTY PROGRAMS

-Montgomery County, Maryland: Public Health Emergency Grant (PHEG)

  • Priority for those with a 50% demonstrated revenue loss through the end of March. Does not apply to anticipatory future loss
  • Not required to apply for State or Federal aid to be eligible

THINGS TO DO NOW

  1. Renegotiate any outstanding debt.
  2. Apply for the appropriate program above
  3. Make a 13 week cash flow projection for 2-3 different scenarios.

 

TIPS

  1. Time is of the essence as a large portion of available funds are availabe on a "first come first served" basis.
  2. For PPP, look at applying with 2-3 banks
  3. Apply for EIDL to get $10,000 emergency grant.
  4. Employers cannot use proceeds from different programs for the same expense (no double dipping)

 

DOCUMENTS NEEDED

  • Completed application
  • Payroll expense verification documents to include:
    • 2019 IRS Quarterly Form 940 and 941 or 944 payroll tax reports
    • Payroll summary report for 2019 and payroll summary for period on or around February 15, 2020 with the following information: 
      • Gross wages for each employee, including officer(s) if paid W-2 wages
      • Paid time off for each employee
      • Vacation pay for each employee
      • Family medical leave pay for each employee
      • State and local taxes assessed on an employee’s compensation
    • If a payroll summary report is not available, employee pay stubs as of February 15, 2020 (or corresponding period).
  • Documentation showing total of all health insurance premiums paid by the company/owner(s) under a group health plan.
    • Include all employees and the company owners
  • Documentation of all retirement plan funding that was paid by the company/owner(s) – do not include funding that came from employees out of their paycheck deferrals)
    • Include all employees and the company's owners
    • Include 401(k) plans, Simple IRAs, SEP IRAs
    • Self-employed individuals, independent contractors, and sole proprietorships: payroll tax filings for 2019 and year-to-date 2020, 1099-Miscellaneous forms and 2019 and year-to-date 2020 income and tax expense from the sole proprietorship
    • Detailed list with corresponding salaries of all employees outside the United States
  • Most recent mortgage statement or rent statement (lease)*
  • Most recent utility bills (electric, gas, telephone, internet, water)*

*Required for debt forgiveness to be provided prior to any forgiveness.

 

 

Contact Us

The Law Offices of Eric J. Wexler

200-A Monroe Street

Suite 110

Rockville, MD 20850

Phone: (301) 296-4465

Fax: (301) 576-3767

Email: info@ericwexlercpa.com

 

Or use our contact form.

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