Updated: July 20, 2020
You have probably heard of the Paycheck Projection Program now from the CARES Act. There have been some recent changes that are important for your cash and forgiveness of loans.
On June 5, 2020, the President signed the PPP Flexibility Act.
I keep hearing that Congress will be making some changes to this. I have heard that they may automatically forgive PPP Loans under $150,000. It may not be in your best interest to go through the forgiveness application before 24 weeks. None of the seven banks I worked with are ready for taking loan applications at the time of this article. I have also heard that we might be able to deduct the forgiven PPP expenses. Right now, we cannot deduct these expenses, which means your tax liability will be higher than you think. I would set aside 25% of your PPP loan for tax purposes.
For more information and a template to help you with understanding your potential forgiveness, download this Payroll Protection Program template. You can calculate the potential loan and your forgiveness.
Do you have a financial forecast model in your business that is updated regularly?
There has been additional scrutiny over people that have taken the Paycheck Protection Program...