Although there has been a lot of discussions and attempts to interpret some of the guidance issued late last Thursday from the SBA, there has not been a lot of clarification for the program. Our impression is that all of the banks that were not online on Friday have been accepting and submitting applications over the weekend. Please keep in mind that because of the limited guidance, financial institutions are applying their own definitions as to how the amount of a loan you are eligible for may be determined.
Just a few other quick updates:
First of all, we would strongly recommend that you reach out to your commercial lender to open the lines of communication. We are finding that all the banks have their own checklist of items so we would also urge you to get a list of what exactly your bank is requesting.
If you are planning to submit a PPP application, you should do so as soon as possible or contact us immediately. At this point the SBA is still indicating that these funds will be distributed on a first-come first-served basis.
Along those lines, with regard to the Paycheck Protection Program, the banks are asking for the borrower to provide certification of the data provided. Accordingly there is no need for them to request substantial additional data, such as personal financial statements or even financial statements of the business.
Once things slow down with regard to submitting applications, we will provide more information as to the tax consequences associated with these loans and in particular for the forgiven balances. There are tax implications you will need to be aware of.
Currently there is no clarification as to whether or not Vermont – or most other states for that matter – will be treating the loan forgiveness as taxable income. I am sure that there will be more information coming – hopefully in the not-too-distant future.
As a side note, as of this morning we are not aware of any Vermont business that has received the $10,000 EIDL funds. We are suggesting that the businesses we work with focus more on the PPP loans to make sure this information is submitted ASAP so the funds are received ASAP.
With offices in Williston and Rutland, Davis & Hodgdon Associates CPAs is now assisting small business clients across Vermont by handling their loan application. We are providing clients with peace of mind as we navigate through this crisis and the constantly evolving business environment that is becoming our new normal. For more information about the COVID-19 business response services now available call our office at 802.878.1963 (Williston) or 802.775.7132 (Rutland) today or click here.