The CARES Act includes around $350 billion dollars to fund the Small Business Administration (SBA) in an effort to help companies impacted by the COVID-19 pandemic. Companies seeking emergency loans through this program will need to apply through an SBA approved lender. To help our clients expedite this application process, we’ve added some important new functions to our software.
You can now create the following two reports to quickly gather the information you need to apply for an emergency SBA loan.
SBA Loan Payroll Register
This report acts as official documentation of your payroll costs. You’ll need this when you submit your emergency loan application. Although this is similar to a standard payroll register, it includes health costs, employer taxes, the last four digits and addresses of your employees. The intention of this report is to document one payroll at a time, so you may need to include your payroll invoice and bank statement. Your lender will let you know what specific documentation is needed.
SBA Loan Summary
This report provides you with the basic information you need to fill out the SBA application. If you happen to have multiple Federal Employer Identification Numbers (FEIN), this report will break the numbers out by each company.
You can select different versions of this report as follows:
Just the Answers You Need: This report provides you with your wages and total payroll costs from December 2019 and February 2020. It also gives you your annual 2019 full time employee (FTE) count for 2019.
For the December and February wages you will see Total Wages, Subject Wages (wages under $100k), and Total Costs (subject wages, state taxes, and employer health). Both the Subject Wages and the Total Payroll Costs includes the $100k cap on wages.
Different banks will ask for different Average Monthly Payroll numbers. The correct method would be to use the 12 months preceding the loan. So, for loans originating in April 2020, the dates would be April 2019 through March 2020. This number can be found in the “AvgMonthAprilToMarchTotalCost” column.
Some banks may ask for calendar 2019 averages, which can be found in the AvgMonthCalendar2019TotalCost column. We suggest that you speak with your lender to determine which amount you should use.
Payroll Detail by Month, By Employee: This report will provide you with the most amount of detail. Not every lender will require all the information yielded by selecting this option.
Payroll Summary by Month – Basic: This report will provide you with information from the most relevant columns by month.
Payroll Summary by Month – Detail: This report will provide you with information from all columns by month. It shows additional income columns such as sick pay, holiday and severance.
Things to know
You can access these new reports in your Payroll folder. You should also be aware of the following details:
- If we don’t administer your benefits, the health costs we list will just be the negative amount for the employee deductions. In this situation, you’ll want to run the “Payroll Summary by Month – Detail” report and add in your monthly health costs to the Total Payroll Costs
- This is all preliminary information based on assumptions and calculations. However, every client has different permutations, and those that were onboarded in mid-2019 may have unexpected results. It’s important that you don’t simply run the “Answers You Need” report, but that you also run other reports and verify the numbers. It’s your responsibility to check the accuracy of the information.
- To apply for an emergency SBA loan, you’ll also need the 940s/941s. These are in the Accounting “Tax Forms” folder. You’ll also need your 1099s. Any that we’ve generated will be in the Year End “1099 Mass Export” folder.
Providing our clients with the best service possible is at the heart of our mission, and that includes helping you get through the difficult times we’re facing now. Fortunately, we’re able to add these types of reports, and in turn make applying for emergency SBA loans easier, because we’re a software company with our own in-house development team.
Please know that we are watching the situation, and the legislation closely, in order to provide as much information and guidance as possible. You can visit our COVID-19 Resource page for details about the CARES Act, the emergency loan program and other important information.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.