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SBA Loan Updates and Etc.

Dear Clients of SKJ & Company, P.S.:
We are writing to update our clients on earlier emails, and also to provide the guidance on how to handle the finances in current circumstances.
First of all, following changes have been made to SBA Loan programs.

  • You may apply for both EIDL and PPP loans.

  • All or a portion of PPP loan is forgivable, and any balance is due in 2 years with 1% interest rate.

PPP Loan Term Review

  • Loan Amount: 2.5x of Payroll Costs.

    • If our firm is providing payroll service, we have the information on your estimated loan amount.

    • Any compensation above $100,000 per employee is not included in loan amount.

  • Self-employment workers may also apply for PPP Loan.

    • The loan amount is based on net profit.

  • PPP Loan may be forgiven if following conditions are met:

    • At least 75% of the loan is used on payroll expenses

    • Remaining amount may be used on rent, utilities and other qualified expenses.

    • No compensation over $100,000 can be paid on a single employee.

    • Employee hours cannot be reduced. Wages may be reduced up to 25%.

      • Exceptions apply if you re-hire employees by 6/30 that were laid off between 2/15 and 4/27.

    • PPP Loan is requested through a private lender.

      • Our office will prepare the complete package ready to be submitted to a loan officer.

      • We may refer a loan officer to you.

    • The payment is waived for the first 6 months automatically.

    • The loan process is relatively quick and easy, but the amount is relatively small.

EIDL Information and process

  • Loan amount is estimated to be 2 months of gross revenue lost.

    • Many clients inquire about possible EIDL loan amount. The above estimate is provided for your information only, and the actual amount may change during the underwriting process.

  • The initial application submission qualifies you for up to $10,000 advance. Once the SBA officer is assigned, formal application and supporting documents are submitted.

We advise our clients to:

  • Apply for both EIDL and PPP concurrently.

    • If you have already requested our firm to prepare your loan package, we will contact you separately.

  • If your business is closed or your employee is unable to work due to COVID-19, provide sick pay and receive tax credit.

    • You do not have to take any actions to receive the credit if we provide payroll services.

    • Please make sure to indicate sick pay when submitting payroll information.

    • For more details on tax credit, please visit here.

  • Apply for unemployment insurance benefit for your employee and yourself.

    • For corporate officers and self-employed individuals, please visit here here.

  • If you currently have business loans, contact your bank to defer payments.

  • Re-hire your employees by 6/30/2020 to PPP loan forgiveness.

Please be mindful of the following:

  • All requests regarding loan application is only received via email.

    • Please understand that we are unable to accept any phone or text message requests.

  • Our office will provide the following assistance.

    • Initial EIDL Application ($10,000 advance)

    • Preparing loan package for PPP loan

    • EIDL Loan package once the SBA officer is assigned

  • Our fee schedule is adjusted as following

    • Initial EIDL Application: $150 ($0 for applicable clients)

    • PPP Application Package: $250 ($200 for applicable clients)

    • EIDL Application Package $400 ($200 for applicable clients)

    • The applicable clients include seniors (65+) and whose income is less than $3,000 per month in 2019.

SKJ & Company, P.S.
Seke Jung, CPA