hi everybody this is lee phillips i'm an attorney don't hold that against me and
you're watching this virtually so you won't catch any attorney cooties or anything but i've done
business structuring and tax planning and stuff for the high-end
clients across the united states for about 35-40 years now and this would be ben ben i am
i i do all the calculations for lee i'm the tax advisor here yeah yeah ben's a former irs
special auditor he's an accountant we won't hold that against him either thanks uh but what we do
is we have helped people through the ppp program in the first round in the cares act now we're
getting the second round and there are things that we need to help you with so that it's going
to be a lot easier for you to apply for the ppp money that's the paycheck protection program the
loan that's forgiven in the small business world so let's get started uh in the next couple of days
on january 13th to be exact they're going to open the ppp but it's only open to what they call
the first round or the first loan tranches and there are only certain lenders those who are in
uh qualified what's the word i'm looking for depressed areas uh that sort of thing then
they're gonna open a second round or a second lone tranche and that will be limited to and
then the sba right now hasn't exactly said when they are going to open it for i'm going to say the
general public that's like me and you we're not in a depressed area we're not special needs we're not
racially this that and the other just normal businesses but it's coming and it's coming fast
so you may as well start to prepare for it and you're going to have to do some calculations
that's what we want to walk through with you today ben does the calculations right so a lot of people
have been calling us and emailing us and asking us do i qualify for another ppp loan and so there
are lots of different criteria that you have to meet on top of what we're going to show you today
you can't have more than 300 employees and you can't do this but i'm assuming and most of the
folks that we're working with you've got a small business few employees and you're trying to keep
the doors open through covid so let's go through and figure out the number aspect of it and just
assume that you meet all of these other rules okay the reality is that 99 of work of of you
are going to qualify for this round two if you meet the gross receipts test so uh as you've heard
you have to have a 25 or more reduction in gross receipts when comparing any quarter in 2020 versus
2019. the same quarter in 2019 good point so i have to compare the first quarter and 2020 to the
first quarter in 19. and if you don't know what a quarter is it's it's three months january forever
february march is first quarter may june july sorry april may june the second quarter july
august september 3rd we're all paying a lot yeah okay you definitely don't so all right
let's let's pull up a sheet right now lee and let's uh let's walk through how you calculate the
uh the how you compare the numbers okay what we want to do is it's going to be the same concept
for any quarter that you do so let's just go ahead and start with the first quarter like we said
you've got to do first quarter to first quarter yep so see i'm going second quarter that's wrong
right right can't do that so we have to have the first quarter versus first quarter okay so
let's compare 2020 versus 2019. now let's save everyone some time here if your number for 2020
is higher than 2019 just forget it you're at 100 there and eighty dollars there your
income didn't go down so don't even bother with this calculation shoot over to another quarter
okay so i'm using easy numbers here let's say first quarter twenty twenty was eighty dollars
you go down here and 2019 it was a hundred dollars so we've gone down um obviously any of us looking
at this can see that's a 20 reduction in gross receipts so let's do the math here if you do 80
over 100 that's going to give you 0.8 0.80 right yep then you go subtract so let's do 1
minus .80 that gives us point two two o but that's not twenty five percent you
gotta have at least twenty five so that would be twenty percent so we didn't qualify that year
and so yeah for that quarter sorry so what you're going to do is you take
the 20 20 year that quarter divided by the 2019 quarter you're going to get a percent
you're going to get a decimal then you take 1 and subtract it from that decimal it needs to be
0.25 or higher if it's not 0.25 or higher you don't qualify for ppp round two
and so so you do it for each quarter and you only need one of those match up core quarters to be
less than to to be a 25 drop or more and then you would qualify and when you now if if my whole year
in 2020 is less than 2019 can i qualify no has to be compare quarter by quarter it's only quarter by
quarter it's only a quarter by quarter and don't uh i wouldn't definitely don't play around with
your income to try and make yourself qualify for this loan you're not going to have to show these
calculations when you get the loan but when you go to for forgiveness you're going to have to
show these calculations and prove this and so that's how you do it and it's the same concept
for each quarter i think that by the way they will audit these in in likelihood because they've given
themselves i think like five years to audit them and no they're not doing anything through ppp uh
right now in coronavirus land but when coronavirus gets back to normal and when the government gets
back to normal i think that they're going to be hunting these pretty close i do too so anyways
that's how you do it that's it that's it's an easy sounds complicated it's a very easy calculation
you don't have books and records i guess the quickest way is to add up all your deposits
for each of the quarters through the year and assuming you're depositing all of your income
that's going to get you a quick calculation too so if you're on cash basis so so see if you qualify
if you qualify pay attention because in the next week or so we expect that the sba will announce
when the standard lending institutions can start accepting applications for this second round ppp
you might remember in the first round the money went fast and in fact the big companies took
it all up this time they've tried to get rid of the big companies by limiting it to
the 300 employees or less but it still could go fast so yep get drunk get your foot in the door
as soon as you can this is lee phillips and ben rucker and we're talking about qualifications
for the new round of ppp in january 2021. the primary qualification which is a 25
reduction how to calculate that yeah there are other rules so all right good