Catering boss must read the blue words above

This issue brings you good news first. On May 5, the House of Representatives passed a new bill with an overwhelming victory, aimed at greatly relaxing the rules of PPP loans.The bill includes the following:

• The proportion of loans that must be used for employee salaries will be reduced from the current 75% to 60%;
  
• The duration of the loan can be extended from 8 weeks to 24 weeks;
  
• If the loan cannot be converted into a grant, extend the repayment period from 2 years to 5 years;
• The limit on hiring the same number of employees as before the outbreak occurred from June 6 to the end of the year

Currently the bill still needs to be passed by the Senate, but due toThe two parties in the House of Representatives have one-sided support, and the bill is very likely to pass.At present, the policy changes frequently, please follow us, the news of the North American catering industry is the first to know!

Supplementary rules for application for exemption on May 5

In the last article, we introduced how to apply for a PPP loan exemption under the current policy:Teach you how to prepare for a PPP loan exemption application! 【Dry goods collection】On May 5, the US Federal Small Business Administration (SBA) again issued a 22-page PPP loan exemption application details update.

althoughAlthough it has not been finalized yet, as far as the current situation is concerned, the condition that 75% of the loans must be used for employee salaries is likely to be reduced. Therefore, let's take a look at all kinds of money other than employee salaries that can be paid with PPP loans.

The previous waiver application only wrote that this loan can be used to repay, loans that occurred before February 2020, 2, and interest paid during the coverage period (excluding Prepayment); but this version is updatedExplained that the money can also be used,Debt of purchasing commercial physical assets (such as the purchase of large equipment, large furniture, etc.) and interest in line with market interest rates that occurred before February 2020, 2.

As for rent, the PPP loan can be used to pay the rent paid during the coverage period of commercial lease contracts existing before February 2020, 2, or the rent on the next billing day after the end of the coverage period and the interest accumulated during the coverage period .

The water grid gas fees, etc., which existed before the coverage period, can also be repaid with the PPP loan during the coverage period and included in the exemption amount. but,Internet fees are simply network fees and do not include service fees provided by third parties on the network (such as enterprise cloud).

Emphasis on number of employees and salary

As local governments gradually resume workThe PPP loan exemption application limits the number of employees. Many bosses now want to re-employ employees but the employees are unwilling to return. This money cannot be sent out, which leads to a reduction in FTE and affects the amount of exemption.

In view of this situation,SBA clearly lists 5 major conditions in the rules,If all can be satisfied, it will not affect the impact of this employee on the number of employees:

01

The borrower proposes to re-employ (or revert to the previous working hours) in writing to the employee during the coverage period;

02

The re-employment salary (or working hours) returns to the previous level;

03

The offer was rejected by the employee;

04

The borrower has written evidence that the employee rejected the offer;

05

The employee reported to the local unemployment bureau within 30 days after the employee refused.

At the same time, SBA also emphasized that if employees voluntarily resign or apply for a salary reduction, they lose their ability to work due to the epidemic, and they are hired together,Both will exempt the reduction of FTE.

If an employee works 40 hours or more per week, it is regarded as Full-Time Employee. In order to simplify the calculation, all Part-Time Employee will be regarded as 20 full-time employees who work 0.5 hours per week.

It should be noted here that the salary level depends entirely on Pay Rate and has nothing to do with working hours. If the working time of a full-time employee is reduced to become a part-time employee, thenIn this case, the reduction in salary will not be counted as a reduction in salary of more than 25%, But it will reduce the number of FTEs and requires additional part-time or full-time completion.

However, if the basic salary of the employee is reduced by more than 25% during the coverage period while the working hours remain unchanged, the amount of PPP loan repayment will be affected.

As for bonuses that are not part of the employee’s ordinary salary,During the coverage period, as long as the number of ordinary remuneration plus bonuses does not exceed $15,385 per person (calculated based on the total remuneration of US$10 per person per year),It can also be included in reasonable salary costs.

In addition, if the employee can collect a tip from the guest during the coverage period, the money can also be included in the loan repayment amount. Catering owners can record the amount of this amount in detail, or fill in the application with a reasonable and reliable estimate.

Process after submitting the waiver application

Within 60 days after receiving the borrower's application for exemption, the bank will notify SBA of the amount of exemption, and SBA will allocate the amount within 90 days.

have to be aware of is,If a borrower has received EIDL Advance (up to $10,000, based on the number of employees), SBA will deduct this amount from the rebate amount.

Within 6 years after repaying the loan or being exempted from the loan, the borrower must retain the information related to the PPP loan.If the SBA believes that the borrower does not meet the requirements, it has the right to require the borrower to repay all the exempt amount.

Financial Advisor | Lemon Jun

Text finishing | Chenpi Red Bean Paste

Reference:

https://www.cnbc.com/2020/05/28/coronavirus-stimulus-house-passes-changes-to-ppp-small-business-loans.html

https://www.forbes.com/sites/alangassman/2020/05/23/may-22-ppp-final-interim-rules-provide-further-guidance-and-some-surprises/#289caaf73f12

About "North American Meal Exam News"

"North American Meal Exam News" is the sister number of the North American head gastronomy new media "Eating Food Team". It aims to serve North American Chinese food and beverage practitioners and is committed to building a professional service platform for the North American food and beverage industry. We hope to promote the two-way exchange of Chinese and American catering culture, support Chinese food to go overseas, and serve overseas brands in China.

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