During this unprecedented time of global pandemic and economic standstill, our government has issued an unprecedented financial aid for employers to keep their employees and practices afloat.
If you haven’t heard already, Friday, April 3, 2020, is the first day that employers can secure funding by applying for the Paycheck Protection Program (PPP) through the CARES Act, signed last Friday by President Trump. This is an exciting opportunity for practices to receive this special loan to ensure they can stay open for business and recuperate losses due to the COVID-19 pandemic.
Mr. Owen E. McCafferty, CPA, tells us in this week’s Quick Cup of Knowledge what information practice managers need for an application, what to expect, and what’s important to know. All medical professionals are busy and unusually stressed at this time, but don’t let your practice miss out on this opportunity to safeguard the clinic and your employees.
Paycheck Protection Program Details
What makes this loan so special is that it doesn’t require as much information to apply, it’s quick (you could receive the funds in 3 weeks or less), and it requires much less underwriting than other loans.
McCafferty says you can expect to receive the equivalent of 2.5 months of your average payroll costs, up to $100,000. If at the end of 8 weeks you can prove that the money was used for payroll and up to 25% of the rent or interest expense, the loan may even be forgiven! Make sure to meticulously document everything.
Because of the number of employers applying in a small time frame, limited bandwidth may become a problem. That’s why Mr. McCafferty recommends getting on the phone with your banker to make sure you reserve a slot for the start of your application. Have all of your forms and information on hand.
If you’re not sure how to access the information you need, your banker, a certified veterinary practice manager, a practice manager who handles payroll, or your CPA are resources to reach out to.
What Do You Need?
Here are the things you’ll want to have on-hand for your PPP application:
- Gross income from the past 12 months; include March 2019 to March 2020
- 2019 Gross Income, 2018 Gross Income, 2017 Gross Income
- All I-9s
- All W-4s
- Schedule of employee pay from January 2019 to March 31, 2020
- Forms 1120, 1120S, or 1065 (practice start date, employee ID, practice address, and tax information)
- 941s for the last 6 quarters
Some additional tax benefits for companies and individuals are included in the CARES Act as well:
- Special employee retention credit (as much as 50% credit)
- Educate your employees to individual benefits (profit-sharing plans, etc.)
- They’ve waived the premature distribution tax
- Payroll tax deferments available (not recommended)
Here are the points of Mr. McCafferty’s advice to practice managers or owners in a nutshell:
- Act now
- Keep precise records and document everything
- Organize those records
- Know your options
- Stay informed
- Don’t be afraid and stay safe!
Visit Viticus Group's COVID-19 in Veterinary Practice web page to get more news, updates, resources, and blogs about this novel virus.
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