How To Get Your PPP Loan Forgiven In Texas

How to get your PPP Loan forgiven in Texas.

Many businesses took advantage of the Paycheck Protection Program Flexibility Act created by Congress to combat the economic damage wrought by the COVID-19 pandemic. The PPP loans issued under this act were designed to help businesses continue to pay their employees and pay certain utility expenses.

Now that you have the funds, do you have to pay them back?  Surprisingly, you may not have to pay portions of the funds back.  In fact, you may not have to pay back any of the funds.

What portion of the funds, exactly, will be forgiven?

PPP loan funds used to cover eligible expenses incurred over the 24-week period beginning with your initial loan disbursement will be forgiven. Those expenses include payroll, mortgage interest, rent, and utilities. For payroll, eligible expenses include salary, wages, and many benefits. Expenses related to electric, gas, water, sewage, telephone, internet, and transportation are considered utility expenses. Additionally, you must have used at least 60% of the PPP loan funds to cover payroll expenses.

Once you’ve determined how much of the PPP loan funds were used to pay eligible expenses and that you cleared the 60% hurdle, you need to find out what percentage of the PPP loan funds spent on eligible expenses will be forgiven. There are two wickets to cross when making this determination:

  1. The amount of loan forgiveness you receive is dependent upon the change, if any, in the number of your employees. If the number of employees you employed during the eight-week period that started the day of your initial disbursement is equal to the number of your employees during either: (i) February 15, 2019 to June 30, 2019 or (ii) January 1, 2020 to February 29, 2020, than all of your eligible expenses will be forgiven.  If the number is less, the total amount of the eligible expenses forgiven will be reduced proportionally.  Of a helpful note, you have until December 31, 2020 to rehire employees terminated between February 15, 2020 and April 26, 2020 due to COVID. Also, you may be allowed to excuse from this calculation employees who have refused an offer to return to work.
  2. Second, you must have maintained your salary levels.  If an employee making less than $100,000 per year receives less than 75% of the money she made during the previous quarter, then the amount of your eligible expenses forgiven is reduced by an amount equal to the difference between her current pay and three-fourths of her previous pay.

Get A Consultation For Your PPP Loan Forgiveness Questions at Hammerle Finley Law Firm in Lewisville, Texas

As you can see, there are several hurdles to meet in order to obtain a full forgiveness of the PPP loan funds you borrowed because of COVID. Careful consideration and the help of a Hammerle Findley attorney can help you maximize this important benefit.