Update 5/19/20: The previous version of the tool has been superseded after the release of the loan forgiveness application. For the most recent version please visit the updated post here.
Update on 4/18/20: Sanity Prevails!…maybe. The issue surrounding whether loan forgiveness will be based on Gross or Net payroll still looms. I had not been able to find anyone calling attention to this or talking about it besides myself until I came across this article by Forbes contributor Tony Nitti. See point #6. There is a snippet in the SBA FAQ that Nitti interprets to mean they are going to base loan forgiveness on gross pay. This seems like someone in DC is finally succumbing to common sense. But I agree with Nitti. It would have made a lot more sense to put this in the guidance rather than burying it in a footnote to an FAQ. The tool has not been updated yet, nor has the explanatory video. At this point we are waiting to see if the guidance for calculating loan forgiveness based on FTE’s, wage reduction and the restoration of same prior to 6/30/20 becomes any less confusing before overhauling those sections of the tool.
Update on 4/10/20: A line was added to take into account the Treasury Secretary’s decision to limit use of funds to 25% for non-payroll cost purposes. The format of the loan forgiveness section was also changed to mirror the format of the section used to calculate the maximum loan amount.
Update on 4/3/20: A line was added to exclude wages of those whose principal place of residence is outside the US. This was always there, but it didn’t apply to situations we were dealing with. As use of this tool has become more widespread it made sense to add this important provision.
Update on 4/2/20: We eliminated the calculation of monthly payment that was predicated on language in the law specifying a maximum interest rate of 4% and a maximum maturity of 10 years. SBA has provided guidance that interest rates will be set at 1% interest rate and loans will mature in 2 years. You will need to calculate your own monthly payment based on principle amortization term assumptions.
This excel worksheet does three things:
It walks businesses through the calculation of their eligible loan amount.
It calculates the baseline FTE’s required to achieve zero reduction in loan forgiveness.
It allows businesses to predict covered period FTE’s and re-instatement FTE’s in order to forecast loan forgiveness and monthly payments on unforgiven amounts.
This tool has changed multiple times since it’s release as new guidance becomes available. We expect it will change further, especially as pertains to the forgiveness aspect of the loans after funds are dispersed. If you want to be apprised of future changes provide your email below and we will notify you of revisions.
In an earlier version of the video above we referenced a triage assessment we use to help businesses forecast cash flow for the remainder of 2020 and necessary sales levels to preserve cash reserves. More information about that tool can be found at this link.
Previously we shared a video on how to apply for these loans,.