THRIVEAL CARE Act Decision Chart

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1		Author Eric Killian, CPA, Thriveal Member
2	v.2020.04.04 THRIVEAL, LLC	Small Business Debt Relief	Delay of Employer Payroll Taxes	Employee Retention Tax Credit ERTC	Paycheck Protection Program PPP	SBA Economic Injury Disaster Loan EIDL	Emergency Grant EIDL Grant

3	Who	If you have an SBA 7a Loan you should do this whether or not you need it	This is basically a loan.	Businesses who have been forecd to close or have had a 50% reduction in revenues, and who are unsure if they will rehire all employees.	Business who keep all or a large percentage of staff employed or will be rehiring staff by June 30	If you need to reduce staff, but still need a loan for operating expenses.	If you need cash while you wait for EIDL approval
4	Qualifications	Borrowers with SBA 7a Loans	Any Employer (except those doing the PPP program)	Place of business forced to close or 50% reduction in revenues.	Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.	Economic Hardship, very broad definition so you probably qualify	Economic Hardship, very broad definition so you probably qualify
5	Where	Your current lender	CPA & Payroll tax provider	CPA & Payroll tax provider	From SBA7(a) approved lenders	SBA Website	SBA Website
6	Benefits	Free principle and interest loan payments for 6 months	0% Interest Loan	Free Money Flexibility with rehiring employees	Loan Forgiveness 6 month deferrment on portion not forgiven.	Cheap Money, includes $10,000 grant No lending fees Covers more than just wages: rent, working capital, you name it. Can redirect other positive cash flow to pay down other loans.	Grant that does not need to be paid back
7	How Much	6 months of payments (principle and interest)	About 6.2% of employee wages from 2/15/2020 to 12/31/2020. Example: $100,000 in wages = $6,200 loan	50% of wages in quarter, up to $10,000 wages per employee from 3/12/2020 to 12/31/2020 (50% of $10,000 in wages = $5,000 credit maximum per employee)	2.5x average monthly compensation for 2/15/2019-6/30/2019 Payroll Exclude salaries >$100,000 from calculations	Up to $2 Million	$10,000
8	Maximum Loan Size	not applicable	not applicable	not applicable	$10 Million	$2 Million	$10,000 grant (not loan)
9	Term	6 months	2 years	not applicable (not paid back)	2 years	10-30 Years	not applicable (not paid back)
10	Maximum Interest Rate	Prime + 2.75%	0.00%	not applicable	1.00%	3.75% for businesses 2.75% for nonprofits	not applicable
11	Deferrment	6 months of payments are made, so not really a deferrment because does not need to be paid back Contact your lender if you need additional relief beyond the 6 months	Two years in total 50% paid back at the end of 2021 50% paid back at the end of 2022	not applicable	6 months, but interest accrues on portion of loan not forgiven	First 6 months of payments made under CARES Act, do not need to be paid back.	not applicable, not paid back
12	Maximum Guaranty	original loan terms apply often 85% for loans up to $150,000 and 75% for loans greater than $150,000	employer shall be solely liable for the payment of such applicable employment taxes before the applicable date for any wages paid by such person on behalf of such employer during such period.	not applicable	no personal guarantee required	<$200,000 no guarantee required >$200,000 guarantee required	no guarantee required, not paid back
13	Collateral	original loan terms apply ror loans over $350,000, loan is collateralized to maximum extent possible	none required	not applicable	none required	No if <$25,000 Yes if >$25,000 (as of 4/4/2020)	no collateral required, not paid back
14	Forgiveness	Only for 6 months of covered payments	none required	not applicable	Yes, potential based on calculations	No	$10,000 grant only
15	Turn Around Time	"5-10 business days" (but have heard this is automatic)	Next payroll tax deposit date	Next payroll tax deposit date	"Same Day" (but clearly not happening as of 4/3/2020)	"2-3 weeks" (but porbably more like 1-3 months)	72 hours (but have not seen this happen yet)
16	Downsides	None.	Must be paid back in 2021 & 2022. Payroll provider will need to track. In comparison to EIDL loan amounts, may not be very much depending on amount of wages your business pays.	Must retain some staff May not be as much as PPP or EIDL Grant Stops once business may reopen or revenues are 80% of same quarter prior year (But we know most will qualify for Q1 and Q2 as of 4/1/2020) Reduced by FFCRA credits	Only for 8 weeks of wages. Offset by workers not rehired by 6/30/2020. More paperwork to get forgiveness. May be less than ERTC or $10,000 EIDL Grant	May take weeks or months for approval. It's a loan, must be paid back.	May be less than PPP or ERTC Do the math
17	Combine?	Yes, with any program here.	May be combined with PPP but the tax deferral portion won't be forgiven. Can be combined with EIDL.	May not combine with PPP. May combine with EIDL but use funds for different purposes Example: PPP for wages, EIDL for rent	May not combine with ERTC. May combine with EIDL but use funds for different purposes. Example: PPP for wages, EIDL for rent	Yes, with ERTC and PPP but use funds for different purposes. Example: PPP or ERTC for wages, EIDL for other overhead expenses	Yes, but $10,000 grant offsets PPP forgiveness.
18	Notes		May defer payroll tax portion for the time under the PPP loan period (8 weeks), but must stop deferring once loan is forgiven.	If your local government officials were to issue a stay-at-home order on March 31 and lift the ban on April 2, you would theoretically qualify for the ERTC for both the first and second quarters. However, this is going to be up for IRS determination when it comes up with its regulations at a later date.	[Edit: April 2, 2020] Final Guidance says instructors paid as independent contractors do not count towards payroll wages for purposes of the loan calculation.		The EIDL Grant may be calculated as $1,000 per employee up to $10,000 maximum.
19	*For clarity, the Family First Coronavirus Response Act is omitted.						Author Eric Killian, CPA, Thriveal Member, https://thefitnesscpa.com
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22	Assistance Decision Questions
23	- Does the company have the ability to pay out 50% of its wages during this time? If not, ERTC may not be as beneficial. Consider PPP or the EIDL
24	- Assuming that the company has a qualifying quarter for the ERTC, is there a likely path to getting above the 80% gross receipts threshold in the next quarter? If there isn’t a path there, the ERTC has to be seriously considered. If there isn’t a path to the 80% threshold in either of the next successive two quarters, the ERTC is definitely something you should look at closely, especially if safeguards aren’t put in place to avoid taking advantage of loopholes.
25	- Has the company already laid off most of its staff or significantly reduced wages? If it has and can’t rehire those folks or restore wages, the PPP is certainly less beneficial and potentially not beneficial at all.
26	- Does the company have a high overhead or lots of debts that can no longer be afforded due to COVID-19? At least consider the EIDL in that situation.
27	- Remember the fact that the EIDL will pay out that $10,000 grant. If the PPP and ERTC don’t get up near that amount, it might be worthwhile to look into the EIDL for your clients. Stack EIDL with PPP or ERTC
28	- Is all hope lost in the short-term, even with the 8-week stopgap provided by the PPP? Consider advising the company to shutter temporarily and go to unemployment.
29	- Is all hope lost permanently? It’s sad to think, but there is a tangible percentage of small businesses across the country that flat out won’t make it through COVID-19. As the late, great Kenny Rogers once said, “You’ve got to know when to hold ‘em, know when to fold up, know when to walk away, and know when to run.” It’s better to rip the band-aid off now, send our clients to unemployment and give them an opportunity to start over once COVID-19 is history than to allow them to keep piling up debts and added stresses that will only make life more and more difficult for them and perhaps postpone the inevitable.
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32	Resources
33	https://www.irs.gov/coronavirus
34	https://home.treasury.gov/news/press-releases/sm962
35	https://www.markowitzaccounting.com/ppp-vs-ertc
36	https://www.markowitzaccounting.com/employee-retention-credit
37	https://www.markowitzaccounting.com/payroll-protection-program
38	https://www.markowitzaccounting.com/eidl-loans
39	https://www.schatz.senate.gov/coronavirus/small-businesses
40	https://www.schatz.senate.gov/coronavirus/small-businesses/sba-economic-injury-disaster-loan-and-emergency-grant
41	https://www.schatz.senate.gov/coronavirus/employee-retention-tax-credit
42	https://www.applepiecapital.com/sba-coronavirus-relief
43	https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-covid-19-stimulus-a-taxpayer-guide.pdf
44	https://www.wyden.senate.gov/download/covid19-small-business-relief-qanda
45	https://www.journalofaccountancy.com/news/2020/apr/paycheck-protection-program-ppp-loans-sba-details-coronavirus.html
46	https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm
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49		Eligibility evaluations are limited to whether your business was operational on
50		February 15, 2020, and had employees for whom you paid salaries and payroll
51		taxes, or paid independent contractors, and whether your business is
52		substantially impacted by public health restrictions related to COVID-19.
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