The Paycheck Protection Program is off to a rocky start. The SBA provided guidance to approved lenders last Thursday night, with the expectation that banks would be processing applications by Friday. Lenders were delayed in accepting applications, websites were overwhelmed, the SBA eTran system crashed, banks only serviced their own clients (and only those with outstanding loans), Wells Fargo stopped accepting applications, regulatory guidance is still needed on applications for sole proprietors and independent contractors, adjustments could still come on relaxing affiliation rules for venture-backed companies, and it’s becoming very clear that additional funds are going to need to be allocated.
Deep breath.
Despite all of this, Compass East built our PPP loan size calculator from scratch to support our clients in submitting over $5m in applications. While these loans still need to be processed by our clients’ respective banks, the important part is our clients have their place in line given funds are first come first served and likely to go quickly.
Now that we have seen the application experience with a number of different banks, we want to share the Compass East PPP Loan Calculator publically and provide insight on the necessary supporting documentation requested so far. This has varied from bank to bank, as some have asked for more detailed information than others, but to ensure there are no application delays we’ve errored on the side of providing too much information rather than too little.
Download the Compass East PPP Calculator
Here is a comprehensive list of what supporting documentation banks have asked for to date:
Information needed for the Compass East calculator:
- Payroll summary for the chosen measurement period (Trailing 12 Months or 2019)
- Payroll information needed by employee for: Employment Hire and Termination Dates (if applicable), Total Compensation for Hourly and Salaried Employees (Wages, Tips, Commissions, Severance, Fringe Benefits, Bonus, PTO Pay),
- State and Local Taxes Paid, Payments for Employer-paid Health and Retirement Benefits
- Payroll tax withholdings (for the period after 2/15/2020 per the Act is most notable, as the original Act called these amounts to be deducted. However, in the most recent guidance issued, employee withholdings are not intended to be deducted from the calculation.)
Supporting Documentation Requested from Banks:
- Paycheck Protection Program Borrower Application Form
- W-2 Payroll Summary
- 2019 Form 941 and 940
- 2018 Tax Return
- 2019 Balance Sheet and P&L
- Copy of Driver’s License or Passport for ID for anyone with 20% or more ownership.
- 1099s – despite Independent Contractors not counting in the payroll cost calculation we’ve still had banks asking for 1099s. We’re providing to avoid slowing down the application in any way.
- Proof of health insurance payments – Invoices/bank statements
Instructions:
- Start on the Summary Tab. Input the name of your entity, if you are a Seasonal or Non-Seasonal Business and if you were operational in 2019.
- On the Summary Tab, Row 17, select the timeframe you are using for your calculation. If using 2019 for your 12 month period, use 12/31/2019 as your end date, for a Trailing Twelve Month calculation use end of February or March 2020 as your end date.
- Input payroll information for each employee and owner pay in the “Employee – Measurement Period” and “Owner – Measurement Period” tabs. These will automatically total up and populate on the Summary tab to provide your calculation.
- To estimate your forgiveness amount, enter Mortgage Interest Payments, Rent and Common Area Maintenance charges, and Utilities.
- Once all payroll and expense information has been entered into the input tabs, all information will flow into the Summary Tab and Printable PDFs tabs for your review. You will also need to enter Weekly Hours used for calculating FTE’s in Row 27 on the Summary Tab and an Estimated Number of FTE’s as of 6/30/2020 on Row 157 to calculate your Loan Forgiveness Reduction estimate.
The Compass East PPP Loan Calculator can be extremely helpful in calculating your maximum loan amount and provide a detailed overview to your lender. Hopefully our tool is helpful in quickly calculating your PPP Loan amount and provides insight on the proper documentation necessary to file.
If you have any questions or would like to engage Compass East to consult in your PPP Loan application process, please contact:
John Lanahan
Director Of Financial Strategy
john.lanahan@compasseast.com
(615) 800-8992 ext. 120
We are simply charging hourly for our time to file. Typically this has taken 2-4 hours to complete for our clients, but could vary depending on the amount of information you provide.