Blog

SHARED INVITATION

June 24, 2020 @ 9:28 am

Clients and Friends of BiggsKofford, I’m happy to pass along an invitation for the Scaling Up Workshop, being offered on Wednesday July 1. Many of the BiggsKofford Shareholders and clients have attended this workshop, and everyone believes it was well worth their time (and the small fee). As with most events – this will be held virtually next Wednesday morning. You can see the invitation and sign-up below. Best, Chris Blees BiggsKofford CEO WORLD-RENOWNED SCALING UP WORKSHOP NOW VIRTUAL ~ RESERVE YOUR SPOT TODAY Learn tools and strategies to help navigate this challenging time at this highly interactive VIRTUAL Scaling Up workshop. Participate from your computer. Hosted by Top Colorado Region Scaling Up Coach Wednesday, July 1, 2020 8:00 am – 12:00 pm MDT LEARN MORE OR REGISTER NOW > For the best results & biggest impact, bring your leadership team.  Our workshop will teach you to beat the odds and get started with the Scaling Up growth framework (Rockefeller Habits 2.0).   The world-renowned Scaling Up Business Growth Workshop has empowered more than 40,000 executives and their leadership teams to scale up smarter and accelerate profitable growth using a time-tested and results-driven methodology. Find CASH to weather the storm and seize opportunity Update …

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PPP Forgiveness Webinar Follow UP

@ 9:27 am

We want to thank everyone who was able to attend our Town Hall webinar this morning with Chris Blees, CPA, CM&AA and Austin Bucket, ACA, CM&AA. We had great input from the audience and some really insightful discussion. We hope you all found it valuable. For those who were not able to attend live, we have the recording of the webinar on demand HERE. We also have our presentation slides available HERE. Lastly, we have a summary of our Q&A session HERE for quick reference of common questions. If you have questions that did not get answered or something specific to your circumstance, please contact us and we will be happy to discuss how we can support you and your business. Again, thank you to all of our attendees as well as Chris and Austin for a great presentation.

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New PPP Loan Forgiveness Applications Released

June 18, 2020 @ 8:38 am

The U.S. Small Business Administration (SBA), in consultation with Treasury, released Wednesday a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans. Join us for a Town Hall Webinar today at 10:00 by registering HERE for more information and input from the experts. You can find the updated applications HERE on our COVID-19 Resource Page. Application highlights The revised PPP Loan Forgiveness Application and instructions include a number of notable items. Among them are: Health insurance costs for S corporation owners cannot be included when calculating payroll costs; however, retirement costs for S corporation owners are eligible costs. Safe harbors for excluding salary and hourly wage reductions and reductions in the number of employees (full-time equivalents) from loan forgiveness reductions can be applied as of the date the loan forgiveness application is submitted. Borrowers don’t have to wait until Dec. 31 to apply for forgiveness to use the safe harbors. Borrowers that received loans before June 5 can choose between using the original eight-week covered period or the new 24-week covered period. New EZ application details The EZ PPP Loan Forgiveness Application requires fewer calculations and less …

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The Current State of the PPP Forgiveness Process

June 16, 2020 @ 3:27 pm

On June 5th, President Trump signed the Paycheck Protection Program Flexibility Act of 2020, which made significant changes to the PPP program. The Bill he signed was the exact law passed as H.R. 7010 by the House of Representatives. Since then, the Treasury Department issued regulations on June 11th, which included some important pronouncements. All of the information below, as well as any updates will be discussed at our PPP Loan Forgiveness Town Hall Webinar this Thursday the 18th at 10:00 am. Register for that HERE and send any questions you would like addressed ahead of time to mwoolfolk@biggskofford.com. No 60% Cliff The Treasury Department does not consider the 60% requirement, which replaced the 75% requirement as to amounts spent on “payroll costs” to be a “cliff.” If a PPP borrower cannot spend 60% or more of the loan proceeds during the 8- or 24-week testing period on payroll, state and local payroll taxes, group health insurance and retirement plan contributions, then there will nevertheless be PPP loan forgiveness based upon whatever is spent on the above “payroll costs,” plus up to 66% of the amount spent on the above items, to the extent of permissible rent, interest and utility …

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HHS Provider Relief Fund Expanded to Medicaid & CHIP Providers

June 10, 2020 @ 7:04 am

HHS Provider Relief Fund Expanded to Medicaid & CHIP Providers Today, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is announcing additional distributions from the Provider Relief Fund to eligible Medicaid and Children’s Health Insurance Program (CHIP) providers that participate in state Medicaid and CHIP programs. HHS expects to distribute approximately $15 billion to eligible providers that participate in state Medicaid and CHIP programs and have not received a payment from the Provider Relief Fund General Distribution. HHS is also announcing the distribution of $10 billion in Provider Relief Funds to safety net hospitals that serve our most vulnerable citizens. The safety net distribution will occur this week. “Healthcare providers who focus on treating the most vulnerable Americans, including low-income and minority patients, are absolutely essential to our fight against COVID-19,” said HHS Secretary Alex Azar. “HHS is using funds from Congress, secured by President Trump, to provide new targeted help for America’s safety-net providers and clinicians who treat millions of Medicaid beneficiaries.” HHS is providing support to healthcare providers fighting the COVID-19 pandemic through the bipartisan CARES Act and the Paycheck Protection Program and Health Care Enhancement Act, which allocated $175 billion in …

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JOIN US! PPP FORGIVENESS WEBINAR WITH THE EXPERTS

June 9, 2020 @ 1:14 pm

THE PREMIER PPP FORGIVENESS WEBINAR WITH THE EXPERTS The PPP Flexibility Act was signed into law last Friday. In a joint news release, the Small Business Administration and the Treasury Department said they will “promptly” issue rules and guidance; a modified application form; and a modified loan forgiveness application. These new rules have allowed greater flexibility to allow for more forgiveness. But, they also create more questions. So, we’ve decided to host a Town Hall meeting to provide answers! We are excited to invite you to engage with the Directors of our Paycheck Protection Program Response Team as they discuss the key aspects of the PPP Forgiveness process, give you the tools needed to navigate these uncertain times, and answer any questions you may have. The SBA is expected to release new regulations and an updated forgiveness application. Our Experts will cover these new rules. THURSDAY, JUNE 18 AT 10AM Register HERE! We look forward to seeing you then!     MEET OUR PANELISTS   Chris Blees, CPA, CM&AA   Managing Partner of BiggsKofford Director of BiggsKofford’s Mergers & Acquisition Services Licensed Investment Banker (Series 7 and 79) with Aaron Capital Chairman of the Alliance of M&A Advisors (AMAA)         Austin Bucket, ACA, …

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Breaking News: Significant Changes to PPP Loan Forgiveness Rules

June 4, 2020 @ 8:09 am

Breaking News: Significant Changes to PPP Loan Forgiveness Rules The Senate on Wednesday evening passed by voice vote a House-passed Paycheck Protection Program reform bill, clearing it for President Donald Trump’s signature. The legislation — titled the Paycheck Protection Program Flexibility Act — was introduced by Republican Rep. Chip Roy of Texas and Democratic Rep. Dean Phillips of Minnesota. It is intended to make loans more accessible under the program by making its terms of use more flexible. The most significant changes: PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness. The payroll expenditure requirement drops to 60% from 75%. However, this comes with the stipulation that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met. Borrowers can use the 24-week period to restore their workforce levels and wages to the …

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Important Highlights from the PPP Forgiveness Application

May 20, 2020 @ 7:46 am

Important Highlights from the PPP Forgiveness Application The SBA released the first draft of the Forgiveness Application and related Instructions on Friday evening (5/15/2020).  The application and instructions can be found HERE. Most of the Forgiveness Application and Instructions follow the same calculations and interpretations that we have been providing our clients to maximize their forgiveness planning. However, this new application provides some new clarifications and changes to the forgiveness process. Here are some important changes to note: Owner Compensation Limit: For the first time, the Forgiveness Application indicates that Owner Compensation will be limited to an amount equivalent to 8-weeks of 2019 compensation. We knew owner compensation would be limited to $15,385, which is 8-weeks of $100,000. But the application now adds this additional limitation. Example: If an owner’s 2019 W-2 was only $60,000, the 8-week limit would be $9,231 (60,000 / 52 X 8), rather than the $15,385 limitation on all other employees.  If an owner’s 2019 W-2 was $100,000 or more, then the limit will be $15,385.   Cash AND Accrual Accounting Allowed: Prior to release of this application there was much debate about whether the law allowed for cash-method or accrual-method calculations of eligible expenses. The …

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Requirements for CARES Provider Relief General Fund Recipients

@ 7:45 am

Requirements for CARES Provider Relief General Fund Recipients Below is an article from the GreenbergTraurig Law Firm blog. GreenbergTraurig did a great job at researching and summarizing the extremely complex process regarding the Relief General Fund and required documentation. We appreciate the hard work that went into this article. The original format of the article can be found here. Many providers have received large payments from the U.S. Department of Health & Human Services (HHS) in April 2020 under the federal government’s effort to provide relief during the Coronavirus Disease 2019 (COVID-19) public health emergency. Many terms and conditions accompany the acceptance of such payments and all recipients must submit documents sufficient to demonstrate that funds are used for healthcare-related expenses or lost revenue attributable to COVID-19.  While HHS has not issued full guidance on the specific documentation requirements (though such guidance may be issued shortly), HHS has promised significant antifraud and comprehensive audits over the use of the general distribution funds.  Providers retaining the funds should plan to document their use of funds and comply with the reporting requirements.   The CARES Act Provider Relief General Distribution Fund Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL 116-136), …

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PPP Loan Forgiveness Application Released

May 18, 2020 @ 11:44 am

PPP Loan Forgiveness Application Released On May 15th, The U.S. Department of Treasury’s Small Business Administration (SBA) finally released the Paycheck Protection Program (PPP) loan forgiveness application, which can be found HERE. The application will include two critical supporting schedules: Schedule A and the worksheet to Schedule A. PPP loan borrowers will submit this application to their lenders to request forgiveness of part or all of their PPP loan. The SBA identified in its press release that it would be issuing additional regulations and guidance to assist borrowers in completing the application and provide guidance to lenders on their responsibilities in the forgiveness process. The application itself answered early questions on how forgiveness will work: Clarifying the requirement that 75% of PPP be used for payroll costs. The application confirms that the requirement that a borrower spend 75% of its PPP loan on eligible payroll costs could result in a reduction in the forgiveness amount, but such failure will not be a breach of the loan requirements or result in none of the loan being forgivable. It also provides that the 75% test applies only to the forgiveness request and is not an absolute requirement that a borrower spend 75% of …

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SBA’s Updated Guidance Regarding “Necessity Certification”

May 13, 2020 @ 1:12 pm

THE SBA’S MOST RECENT FAQ CLARIFIES SAFE HARBOR RULES In the Small Business Administration’s (SBA) most recent Facts and Questions (FAQ’s), updated May 13th which can be found in further detail HERE, clarifies that ONLY loans over $2 Million will need to have further due diligence to verify that the loan was “necessary”. FAQ 46, which asks, “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?” answers the question as to which loans the SBA will be reviewing for the necessity of the Paycheck Protection Program (PPP) loan. FAQ 46 identifies, “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given …

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HHS Provider Relief Funds – Automatic Payments & New Application Portal

May 7, 2020 @ 1:30 pm

HHS Provider Relief Funds – Automatic Payments & New Application Portal Medical practices that serve Medicare patients can participate in the Provider Relief Funds under the CARES Act.  HHS provider relief funds were released in two automatic disbursals released on or around Friday April 16th and again on April 24th as automatic payments. In addition to the Provider Relief Funds medical practices can also apply to either the General or Targeted Funds for additional support.   Automated Payments: The CARES ACT provides for $100 billion in relief funds for hospitals and healthcare providers.  $50 billion of that has been allocated as a General Fund.  The first two distributions were made based on CMS cost report data already on file.  Providers without adequate cost report data on file will need to submit their revenue information to a portal opening this week at https://www.hhs.gov/providerrelief for additional general distribution funds.   Additional Support: If a business feels they have been further impacted and would like to submit a request for lost revenues for additional funding funds can be applied for at https://covid19.linkhealth.com/docusign/#/step/1 A few highlights from the FAQ attached for this application process:   Who is eligible to receive additional payments by submitting an Application …

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Latest News on PPP Loans

@ 11:11 am

As many already know, we have new developments regarding the Paycheck Protection Program (PPP) loans and the associated forgiveness aspect. Below is a brief summary of a few of the more recent updates. For more information, please visit our COVID-19 Resource Page.   Update 1 – Self Employed Individuals The SBA provided some much-needed guidance relating to Self-Employed PPP loan applications and forgiveness. Generally, the PPP loan amount is calculated as 2.5 months of average monthly payroll expenses. However, since many Self-Employed Individuals do not have payroll, their loan amount is based on 2019 net profit divided by 12, to get a monthly average net profit. Multiply this number by 2.5 to get the PPP loan amount. Self-Employed Individuals with other employees may also receive additional PPP loan amounts following the same calculations as other businesses. The forgiveness calculation for Self-Employed Individuals is also different. Instead of spending the loan proceeds on payroll, Self-Employed Individuals get an automatic forgiveness amount equal to eight weeks’ of 2019 net profit. No need to spend anything. This is called “owner compensation replacement”. Mathematically, this is almost 75% of the loan amount that gets automatically forgiven. The remaining 25% of the PPP loan may be …

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IRS Denies Deductions for PPP Expenses

May 1, 2020 @ 8:31 am

A primary aspect of the CARES Act was the Paycheck Protection Program. It is so popular that additional funds were appropriated for it. The essence of PPP is that a business borrows from the SBA based on 2.5 months of last year’s payroll. If it spends the money within eight weeks on payroll and certain other expenses such as rent, the loan is forgiven. Please see our earlier newsletters or visit our website HERE for further background on the PPP Loan or assistance in navigating this process. Normally when a loan is forgiven, it results in income to the taxpayer. The CARES Act indicates that is explicitly not the case with the forgiveness of a PPP loan. This gave PPP an extra attraction compared to letting employees collect unemployment, possibly supplementing that with relief payments deductible under Section 139 that would not be taxable to the employees. However, it was identified by some that code Section 265 denies a deduction for otherwise allowable expenses that are allocable to exempt income. The IRS was aware of this and finally provided a ruling in Notice 2020-32 which states: “Specifically, this notice clarifies that no deduction is allowed under the Internal Revenue Code (Code) for an …

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COVID-19 Small Business Response Checklist

April 27, 2020 @ 6:15 am

*Updated as of 4/27/2020*   COVID-19 Small Business Response Checklist Small Business Owners are being stretched and challenged by the recent COVID-19 crisis. In addition to the health and operational changes, Small Business Owners are facing unprecedented financial pressures. Meanwhile, governmental programs and new laws are being announced daily – in an attempt to help. This can be overwhelming for a Small Business Owner. Below are some ideas for Small Business Owners to consider and hopefully help to manage through this crisis. We have organized these ideas into 4 categories: A. Manage and Plan Cashflow B. Debt Options C. Employment Ideas D. Tax Law Changes   A. Manage and Plan Cashflow Create a Daily / Weekly / Monthly Cashflow Worksheet: Project your cash account on a daily and weekly basis using a cash-flow model like this one HERE.  A good cash projection model will identify when inflows and outflows are expected and project your cash balance on a daily basis. This will help identify when a cash shortfall may occur. Predict Revenues / Collections: Your Cashflow model should include known revenue and collections or you can use historical amounts and then “handicap” them for expected reductions. For example, you might …

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IRS Releases FAQs for Payroll Tax Deferrals

April 20, 2020 @ 2:45 pm

IRS Releases FAQs for Payroll Tax Deferrals   The IRS issued Frequently Asked Questions (FAQs) that clarifies the interaction between the employer relief provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the loan forgiveness provision for employers that receive a Paycheck Protection Program (PPP) loan. Section 2302 of the CARES Act permits employers to defer the deposit and payment of the employer’s portion of social security taxes beginning for payroll periods after March 27, 2020 through December 31, 2020. The FAQs also clarify that an employer who received a PPP loan that has not yet been forgiven can also defer the employer’s share of Social Security taxes though the date when the lender issues a decision to forgive the PPP loan.  The employer ceases to be eligible to defer the taxes as of the date of the lender’s decision to forgive the PPP loan. According to the CARES Act § 1106(g), these forgiveness applications must be submitted after the 8-week “Covered Period” beginning on the loan origination date, but before December 31, 2020. Therefore, PPP loan recipients could continue deferring these payroll taxes through December 31, 2020. The employer’s share of the Social Security taxes deferred prior …

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COVID-19 RESOURCES