PPP Loan Guidelines for Future Funding
The first round of appropriations for the Paycheck Protection Program (PPP) is depleted, according to the SBA, but there are expectations for another round of federal funding.
In this video, Ollin Sykes, CPA.CITP, CMA, and Scotty Sykes, CPA, CFP,® talk about aspects of the PPP loan program to help independent and community pharmacies seek financial relief.
Our pharmacy advisory services team is developing general operating procedures for pharmacies that do receive these PPP funds. You will need to track and provide documentation of fund usage to support loan forgiveness down the road. For additional information, see our blog post about the PPP program.
If you prefer to read this content, the video transcript is below.
[Ollin] Well, the PPP loan, as we refer to it, is a very important aspect of today’s financing. It’s stimulus from the government. The main thing a pharmacist needs to be aware of if they have not taken advantage of this with their local bank, or the bank they do business with (if they’re working with a pharmacy issued bank, they could be probably talking with them as well), is go ahead and make an application. Probably sooner rather than later. The process is not complex. We’ve actually had many pharmacies that have already applied and been funded [as of this publication]. This kind of concludes the end of the first week, but that’s the key thing, Scotty, what say you?
[Scotty] Yeah, certainly you probably want to do that sooner rather than later, that’s right. And you know, the design behind this program, kind of giving a little background here is it’s designed to keep your employees employed and maintain your payroll levels. So that’s the whole goal of this program when you are funded, to keep those employees and keep your staffing levels up.
[Ollin] Absolutely, and obviously the forgiveness part as the second part of that equation is once you get funded, you’ve got eight weeks to utilize those funds, where at least 75% has to be used for payroll. And you’ve got to keep up with the same employment essentially you had, say as of February 15th, and if you do that, then the loan is designed to be forgiven. If you don’t do those items, then any part that’s not forgiven will be paid back over a two-year period of time at 1%, but it’s a very important part of your financial picture right at this minute, and you need to, without haste, make sure that the process is moving forward at your bank. Don’t just assume that it is. Reach out and call, and talk with your bank if you haven’t.