Suggested Documentation to Gather for Business Loan Program under the CARES Act

We are digesting the recently passed CARES Act and many things remain unclear that will hopefully be resolved in the regulations due this upcoming week.  We have received calls from many clients and friends asking about the loan requirements under the Payroll Protection Program of the Act.  Generally, the Act will provide a Company 2 ½ times average monthly payroll costs for eligible borrowers.  At the moment, we interpret payroll costs to include salaries, wages and commissions, payments required for group health insurance, retirement benefits, payments for state or local tax assessed on employee compensation.

There are many unanswered questions, and many are asking what they should do now.  We are suggesting each Company start gathering the following financial information in advance:

Payroll:

• Monthly payroll registers “by employee”, for the months January 2019 to March 2020
  • Report should indicate gross wages, employer taxes, and employee withholdings for benefits (i.e., medical, etc.)
• 2019 Annual payroll summary
• Copies of Quarterly payroll tax returns for 2019 (2020 won’t be ready yet) including all unemployment reports
• Accrued Sick / PTO / Vacation
• Include any unused accrued amounts by month
• Certified Payroll Reports
• Union reports indicating employer contribution to the specific union fund (H&W/Pension/Sick, etc.)
• Prevailing wage reports

Employee Benefits for the period January 2019 to March 2020

• Monthly health and benefit invoices (Health/Dental/etc.)
• Provide separate Employer contribution from Employee, if any
• Schedule of monthly payments made for health insurance benefits
• Employer contributions, by month, to retirement plans/401K/profit sharing plans
• 2019 year-end plan census

Financial Information

• Financial operating results (profit and loss statements), by month, for the periods January 2019 to March 2020
  • Prepared on both the accrual basis and cash basis method of accounting

There is no clarity about what financial information will be required.  It is very possible that more, or less, information will be required.  We are suggesting gathering the above information to provide you advance notice of information that may be required.

We are in contact with many professionals in the banking industry to gather information on the loan process.  There is nothing available to them at the moment.

We offer the suggestion of gathering financial information to allow you to be prepared.  Again, there is no information currently available that explains the complete process.  We will be here to assist you with gathering information as well as assist you with any calculations to assist you with the anticipated application process for a loan under the Payroll Protection Program.

DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.