April 21, 2020

Missed out on PPP? What now?

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Missed out on PPP? What now?
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The Paycheck Protection Program, commonly known as “PPP”, has been a HOT topic for many businesses since the CARES Act was passed on March 27, 2020. PPP is a $349,000,000,000 “forgivable” loan program established to help qualifying small businesses to cover payroll costs (along with a few other expenses) during the period that businesses were being impacted by COVID-19. There was a mad rush to claim the $349 Billion, leaving millions of small businesses with no funding.What about the millions of businesses that did not receive the funding? What should you do?

  • Don’t sit back and wait on the next phase of funding for the PPP.
    • There have been a lot of discussions and proposals around potential legislation that would provide additional allocations of funds for the PPP. Hopefully, this will occur and help many businesses in need. However, hoping and waiting is not a strategy.
  • Create a strategy to position your business to get through the crisis and come out strong.
    • Manage Your Cash: Cash-flow modeling is an essential process during periods of uncertainty. A multi-scenario dynamic modeling process can help make sure your business makes smart decisions in the coming months regardless of whether a second round of funding is passed.
    • Gather Information: Information is critical in a crisis. Externally, there are many potential outcomes of disease spread and its impact. Internally, things are changing daily. Know the latest information and use it to model different financial scenarios and drive decision-making.
    • Prioritize, Coordinate, Communicate: Ensure your teams are focused on top priorities. Maintain your supply chain. Stabilize operations. Secure technology. And keep communication channels active (with vendors, customers and employees!)
    • Look ahead: The change we experience from COVID-19 will create opportunities for growth. Most companies will simply focus on managing through the crisis. But, now is the time to monitor customer trends, identify market opportunities, and rethink your business model to position for success
    • More information on COVID-19 Response Management and Planning for Recovery can be found here.
  • Explore other incentives and programs that are available, but may have been overlooked.
    • Payroll Tax Deferral – The CARES Act provided businesses the ability to defer the social security portion of employer payroll tax from March 27, 2020, through December 31, 2020. 50% of the deferred tax will be due December 31, 2021, and 50% due on December 31, 2022. This can provide a significant amount of short-term liquidity for businesses that either did not qualify for PPP or were unable to secure PPP funding.
    • Payroll Retention Credit – Provides a credit of up to 50% of payroll costs for wages paid to employees who are not working due to the full or partial cessation of business or decline in gross receipts. The rules vary depending on your number of employees, but it may be worth revisiting to see if you can benefit.
    • Net Operating Loss (NOL) Carryback – If your business incurred an NOL in 2018 or 2019, you are now allowed to carry back the NOL 5 years in order to claim a refund. The lengthy carryback and quick filing methods provided by the IRS can generate much-needed cash-flow to your business or owners.
    • Qualified Improvement Property – This provision provides that certain improvements to property can qualify for accelerated depreciation which could allow for a significant tax benefit for your business.
    • Main Street Lending Program – The Federal Reserve authorized the Main Street New Loan Facility to facilitate lending to small and medium businesses. The program will lend up to $600 billion to eligible borrowers. Eligible borrowers include all companies with less than 10,000 employees or 2.5 billion in revenue. The loans have a 4-year term with adjustable rates of SOFR plus 250-400 basis points. The loan facility is expected to open in late April or May. Consider if this program could benefit your business.
    • Additional aspects of the CARES Act can be found here.


If you missed out on this round of the PPP, waiting on the second round of stimulus is not a strategy. Focus your attention on cash-flow modeling and exploring other available incentives. If more PPP funds become available, be prepared to take advantage of them, but don’t get paralyzed in the interim. Your Elliott Davis advisor is here to help. Contact an advisor or fill out the form below.Please visit our COVID-19 Resource Page for more information.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change as a result of rapidly evolving legislative developments and government guidance.

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