PPP Relief Round 2 What this Means for Your Business - FRLA

PPP Relief Round 2
What this Means
for Your Business
Partnered by:

Tuesday, January 12, 2021 | 10:30AM
DISCLAIMER: The information provided here is for educational purposes, and FRLA does not
warrant or endorse any particular provider. FRLA is prohibited from providing specific legal,
financial, or accounting advice, and the information represented here is not intended as such.
FRLA encourages businesses to consult qualified competent advisors in these fields to explore their
specific situation. This webinar is being recorded for future use by the association and other
industry members. Your participation in the call is deemed to be your consent to the recording.

SPEAKERS:

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*This webinar is being recorded and will be available at www.frla.org/webinars .

BRYCE WOODYARD, CEO                                     RICK VAN WARNER, PARTNER
• CEO, FTR Hospitality                                   • Previously CEO, Tijuana Flats
• Heads up the outsourced                                  Restaurants
  accounting practice for FTR                            • Over 35 years national restaurant
• 10+ years of accounting and                              industry experience
  finance experience                                     • Former Darden Restaurants executive
• CPA                                                    • Former Editor-in-Chief, Nation’s
                                                           Restaurant News

                                FTR Hospitality
                                     Info@FTRHospitality.com
                                                @ FTRHospitality.com                        3

PPP Guidance & Information: frla.org/covid-19/
•    Second Draw Lender Guaranty Application (Updated 1/8/21) PDF
•    First Draw Lender Guaranty Application (Updated 1/8/21) PDF
•    NEW Application for Second Draw PPP (Released 1/8/2021) PDF
•    Updated Application for First Draw PPP (Released 1/8/2021) PDF
•    Top-Line Overview of First Draw PPP Loans (Released 1/8/21) PDF
•    Top-Line Overview of Second Draw PPP Loans (Released 1/8/21) PDF
•    Procedural Notice – Modifications to SBA Forms 3506, 3507 and 750 CA (PPP only) (Released
     1/8/21) PDF
•    Procedural Notice – SBA Procedural Notice on Repeal of EIDL Advance Deduction
     Requirement (Released 1/8/21) PDF
•    PPP “User Manual” (Nat. Rest. Assoc. Released 1/8/2021)
•    SBA Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned
     Business Concerns (Released 1/6/2021)
•    Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act (Released
     1/6/2021)
•    Interim Final Rule on Second Draw Loans (Released 1/6/2021)

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*This webinar is being recorded and will be available at www.frla.org/webinars .

PPP Relief Round 2:
What this Means for Your Business

                   January 12, 2021

                         Info@FTRHospitality.com

PPP Round 2 Overview
• $284.5 billion in new PPP loans available
• 1% interest rate, 5-year term (unchanged)
• Loans fully forgiven if proceeds used for allowable expenses during a
  selected 8-week or 24-week period that begins once proceeds received
   • Community institutions can make first draw loans beginning Jan. 11
   • Second draw PPP loans begin Wed. Jan. 13

                                  Info@FTRHospitality.com                 6

PPP Round 2 Eligibility
• Open to privately-owned businesses that received first round PPP loans
• Open to private first time PPP borrowers
• Independent location/business with less than 300 employees
• Private multi-unit business with less than 300 employees per location
• Show year-to-year revenue decrease of 25% or more for at least one full
  quarter during 2020
   • Greater than $150K loan – must show documentation to receive loan
   • Less than $150K loan – must show documentation prior to forgiveness
• Have fully exhausted proceeds from first PPP loan for eligible expenses

                                 Info@FTRHospitality.com                   7

PPP Round 2: How Much Can I Apply For?
• $2 million maximum loan size
• $4 million maximum for multi-unit group applying for multiple loans for
  different locations (business entities w/ separate FEIN #s)
• Restaurant and Hotel Owners – Average monthly payroll X 3.5
   • Average monthly payroll 2019, or
   • Average monthly payroll 2020, or
   • Average monthly payroll for 12 months prior to loan origination date (self-
     employed applicants ineligible for this option
• Seasonal businesses (operates 7 mos. or less per year)
   • Average monthly payroll costs for any 12-week period between Feb. 15, 2019
     and Feb. 15, 2020, X 3.5
                                   Info@FTRHospitality.com                         8

Simplified PPP Loan – Less than $150K
• One page certification form
   • Describe how many employees retained because of loan
   • Estimate of how much of loan will be spent on payroll costs
   • Compliance of general requirements under PPP

                               FTR Hospitality @ FTRHospitality.com   9

PPP Round 2: Forgiveness Guidelines
• 60% must be used for payroll expenses, and no more than 40% for non-
  payroll expenses
• Payroll expenses allowed:
   •   Salary, wages, commissions, cash tips (or equivalent)
   •   Vacation pay and sick, medical, parental, or family leave
   •   Severance pay
   •   Payments for employee benefits (medical, disability, etc.)
   •   State, local taxes tied to employee compensation
• Not allowed:
   • Federal employment and FICA taxes

                                     Info@FTRHospitality.com        10

PPP Round 2: Forgiveness Guidelines
• Forgivable expenses for non-payroll:
   •   Lease costs
   •   Mortgage interest expenses
   •   Utility costs
   •   Interest on other debt incurred prior to Feb. 15, 2020
   •   Operations expenses
        • Software/cloud computing used for business efficiencies, product/service delivery, payroll
          expense tracking, HR, sales and accounting expenses
        • Property damage expenses related to rioting, looting in 2020 if not covered by insurance
        • Essential supplier purchases
        • Expenses related to Covid-19 compliance or business adjustment renovations (add drive-
          thru window, protective equipment, plexiglass shields, etc.)

                                         Info@FTRHospitality.com                                 11

Keep on your Radar: Employee Retention
Payroll Tax Credit (ERC)
• Now available to PPP borrowers
   • (Retroactive to March 12, 2020 through June 30, 2021)
• Eligible if revenue dropped by 20% or more OR business suspension
  condition
• Up to $7,000 per employee per quarter (70% of wages per employee up
  to $10,000)
• ERC wages cannot be included in PPP loan forgiveness calculations
• Generally is credited against payroll tax deposits

                                 Info@FTRHospitality.com          12

Changes to PPP Loan Forgiveness
• For loans up to $150K, simple 1-page forgiveness documentation
• Forgiveness not reduced due to Economic Injury Disaster Loan grant
• Allowable business expenses now tax deductible

                             Info@FTRHospitality.com
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Questions

FTR Hospitality @ FTRHospitality.com   14