By James Krech, Audit Senior
It’s no surprise we are currently experiencing unprecedented, uncertain, and unnerving times. As business owners, executives, and managers, your first priority could be tending to the business, identifying all the hardships that are currently present or that could arise in the near future, and making some hard decisions as to how to weather the storm. This response is certainly crucial to ensure the wellbeing and future success of the company and your employees, and there are many opportunities available for you to explore, which we will get into shortly. However, there is something just as equally important as supporting your company, if not more so, and that is caring for yourself. (more…)
The impact of the COVID-19 emergency on all businesses has been transformative. The combination of shelter in place orders with forced business closures have left many facing dwindling demand for products and services. The seemingly overnight shift has forced many to make tough decisions about whether to furlough or terminate employees and how to manage expenses. The depth of the challenge becomes clear in light of the reported 4.6 million Californians who have filed for unemployment. To help cope with the emergency, Congress passed both the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act. The FFCRA provides expanded sick leave benefits and the CARES Act provides various tax and financial relief options. While they attack the emergency from different angles and for different purposes, they are connected through their use of payroll tax credits. (more…)
A major benefit of the Paycheck Protection Program (PPP) was the possibility of converting the loan to a tax free grant. The requirements for this debt forgiveness and the process to request forgiveness were unclear until May 15, 2020, when the Treasury Department released its 11 page PPP Loan Forgiveness Application and Related Guidance. Although the guidance answered many questions and provided several safe harbors for borrowers, many important issues have not been addressed. SBA indicated they would be providing additional guidance shortly. Several members of Congress are calling for changes to the PPP program, which creates uncertainty as to whether these proposed changes will be adopted now or implemented in a future round of PPP funding. (more…)
There has been much confusion due to a lack of detailed guidance related to a borrower’s requirement to “certify their need” for a PPP loan considering “other sources of liquidity”. Our previous blog post, SBA Announces Retro-Active Change to Paycheck Protection Loan Program, discussed this issue.
Earlier today, May 13, 2020, the SBA released FAQ #46 granting a safe harbor for many borrowers.
Under the “safe harbor,” all loans with an original amount of under $2 million will be deemed to have met the certification requirements in good faith. (more…)
The Paycheck Protection Program (PPP) launched in early April with little guidance provided to both borrowers and lenders. Many businesses acted quickly to determine their maximum loan amounts and submit their applications before funds would run out. Recently, there has been scrutiny related to certain recipients of the funds. In light of this, we want to ensure you are aware of the certifications that borrowers were attesting to on their loan applications. Specifically, borrowers were representing that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant”. (more…)
Update May 28, 2020
House passed the Paycheck Protection Program Flexibility Act today. The Senate is expected to vote next week but likely the Senate bill will have different provisions than the House approved today.
By Deepa Bhat, CPA, Audit Principal
In response to the widespread disruption caused by COVID-19, the Financial Accounting Standards Board (FASB) announced in their Board meeting on April 8, 2020, a proposal for delays in the following accounting standards for certain entities: (more…)
By Jeff Faust, CVA, Director of Valuation Services
ASL Business Valuation Services
There is quite a bit of uncertainty with businesses given the global coronavirus pandemic. This uncertainly also means that a company’s value has been impacted since uncertainly creates risk and increased risk lowers value. What is this doing to a business owner? What are they thinking and how are they navigating through all of this? (more…)
By Nick Sabbatini, CPA, Audit Manager
Please be aware of potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration (SBA): https://www.sba.gov/document/report–sba-programs-scams-fraud-alerts
Links in emails and texts. Those few words, in the context of fraud, likely lead you to think of a range of potential threats to your business. If you’ve addressed the risk appropriately, you’ve trained your employees that such communications may even appear to come from management, others within your organization, or from known vendors and customers. However, these types of attacks are likely to increase in times of crisis, when curiosity, empathy, philanthropy, and fear push people to seek new information, help others in need, and find ways to protect themselves. (more…)