A Math Lesson For Paycheck Protection Loan Applications
How to determine a business' maximum loan amount and payroll costs
The Paycheck Protection Program (PPP) got off to a bad start last Friday, creating a lot of frustration and anger. Caught short by an aggressive timeline, many banks still haven’t started taking applications. Even where the program is up and running, banks and applicants are still struggling to understand exactly how the process will work.
Let’s assume that banks will eventually figure out the details. Business owners can get ready by gathering the information they’ll need. And while many elements of the program are still developing, you can count on one thing: The bank you’re working with is going to ask for your payroll costs. They will use them that figure to figure out the maximum amount that they can loan you.
Sound simple, right? Not so fast. The new law and regulations significantly expand the definition of payroll. Calculating these costs has gotten more complicated. Let’s look at what you’ll need to include in your payroll calculation.
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