Information Regarding BaCo Group Assistance with PPP, EIDL Loans, CARES Act Questions, DOL Paid Sick Leave Information

The BaCo Group has adopted a policy of providing assistance to our existing clients with questions about COVID related relief and regulations at no additional charge.  We are providing this service under the following terms and conditions.  We are also noting important steps YOU MUST TAKE in this process to get the maximum benefit from these programs.

1. Any data we provide (such as average payroll, health insurance costs, etc.) is ultimately your responsibility.  Data on payroll, health premiums, SUTA taxes and retirement benefits is obtained directly from your payroll reports or your accounting records and we make no representations regarding accuracy of the data, we are not auditing it and can provide no assurance as to accuracy of the information.
2. There are many legal nuances to these new laws, rules and requirements and much of this is changing on a daily basis.  We are responding to your questions regarding the best available information at the time, but ultimately you should be working directly with a banker to get clarification on these matters.  You should also consider speaking to an attorney to clarify matters of a legal nature.
3. IMPORTANT INFORMATION ABOUT Loan Forgiveness – most companies receiving PPP funding will be eligible for loan forgiveness.  This forgiveness is NOT AUTOMATIC!  You will have 8 weeks from the loan disbursement date to spend funds in order to qualify for forgiveness – and can only spend the funds on payroll and related costs (wages, health insurance premiums, retirement benefits – with no employees receiving monthly compensation exceeding $8,333).  75% of your PPP funding should be spent on these payroll and related costs.  The remaining 25% can be spent on rent, mortgage interest, and utilities ONLY.  In addition, you must maintain the same number of employees as you reported at your application date, and you should not cut wages dramatically.  We are NOT PRIVY to the loan forgiveness application or to how the lenders will define certain matters, we assume these will differ among lenders as the loan applications have.  All of our clients are getting funding at different times, these dates are not tracked in our workflow.  It is up to you to CAREFULLY TRACK each dollar spent, and to seek a loan forgiveness application at the proper time and with the proper documentation.
4. Should you choose to obtain a PPP loan, you are precluded from taking advantage of the employee retention payroll credit programs allowing you to reduce employer payroll taxes or pay payroll taxes slowly under the CARES act.  You are not precluded from offering paid leave under DOL requirements, but should carefully ensure that PPP funds aren’t spent on payroll that will ultimately be reimbursed through the DOL guidelines, as that would be considered double dipping.
5. Communication is the name of the game.  If you have an employee taking paid sick leave under DOL guidelines, you need documentation of their circumstances and you need to communicate with your payroll company regarding how to code these payments in the payroll software.  You also need to be aware of compensation limits surrounding paid leave.  Our website has great links to useful information.
6. It is critical that you keep an open dialogue with your lender and read CARES Act and PPP related correspondence from them to keep up to speed on changes in programs, clarifications, etc.  We have functioned in an advisory role, sharing information we have available.  However, each loan application and note agreement is the responsibility of the company and the terms are outlined individually by each lender.
7. Lastly, communications from the BaCo Group regarding IRS announcements and CARES Act related terms come from our email service provider, constant contact.  We do not use constant contact for marketing purposes – only to communicate vital information to you.  It has come to our attention that some email providers see constant contact emails as spam.  If you wish to have your reminders sent via text, please contact Colin at our office at 214-827-9118 to opt-in.