ST. LOUIS (KMOX) - Now that the Small Business Administration has begun accepting applications for the forgivable loans that are part of the CARES Act coronavirus stimulus package, many small business owners are racing to apply. However, a local accountant is suggesting they wait until next Monday or Tuesday.
Daniel Mudd, a Tax Partner at Anders CPA + Advisors tells KMOX that some details of the application process are still being clarified. "As as far as how you calculate certain numbers that go into the calculation, it doesn't seem like anybody knows definitively on some of those gray areas. People are using their best judgement, working with their banker and trying to get a loan submitted." He says new clarifications are coming in continuously. "All we can do is advise people of what we know today. An hour from now we may know more."
Plus, he says the CARES Act contains other elements that may be more beneficial to their business than the Paycheck Protection Plan. "There are many parts of the CARES Act that every small business needs to pay attention to. Really, you should go down each summarized item in the bill and see if it applies to you or not because there are a lot of other things that'll help small businesses." There’s a summary of those items at anderscpa.com.
Under the act, in order for the PPP loan to be forgivable, Mudd says businesses have to use 75% of it to keep employees on the payroll. There are limits on what the other 25% can be used for. "There's a list for rent, interest on other loans you can use. There will be some type of check after the fact and if you didn't use the proceeds for any of those items on the list then it won't be forgiveable."
Mudd says, in his opinion, business owners don't have to submit the application right away to be better off than they will be if they apply Monday or Tuesday.