PPP - For those getting approved, what was the % given to you out of possible total?

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jeff mc
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PPP - For those getting approved, what was the % given to you out of possible total?

Post by jeff mc »

We applied (to four banks) and got approval with one bank last week. We were a bit startled to see the approved amount was just 50% of the amount we were expecting (2.5 times average monthly payroll).

Is this a common occurrence? Because we were feeling a bit worried that the PPP money would run out a second time, we accepted the loan for half of what we were expecting. The other 3 banks have kept us updated but none had come through with any 'final approvals'. So, clearly an example of a bird in hand is worth two in the bush...

So, if you received a loan, was it 100% of what you were expecting? 50%? What % did you get?
SubPar
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by SubPar »

We got 100% of what was requested, 2.5x average monthly payroll (i.e., we applied for the max loan amount) through our local bank. I applied the day the SBA started accepting applications, with the proceeds being disbursed a couple weeks after the application was approved. I wonder if there's concern of funding shortages with the second round, too...
Jesa
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Jesa »

We also got 100%. There has been some talk about businesses getting less than the requested amount. No clear reasoning on why though.
Bogle_Bro
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

I underwrote a lot of ppp loans, and what 2.5mo was in the clients minds OFTEN did not match our analysis of their paperwork for various reasons.

common examples:

sole props wanted gross receipts but we only approved them for line 31 net income

Companies requested amounts for independent contractors who were used regularly but not technically employees

Companies provided unclear & jumbled payroll records as opposed to 2019 940s

Also, frankly, with the sheer volume and urgency, im sure there was plenty of human error in the calculations on the banks side
Last edited by Bogle_Bro on Thu May 07, 2020 11:02 am, edited 1 time in total.
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MP123
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by MP123 »

We requested and received 100% of 2019 Form 940 box 3.
Bogle_Bro
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

MP123 wrote: Thu May 07, 2020 11:02 am We requested and received 100% of 2019 Form 940 box 3.
This is the simplest & most straight forward documentation scenario where expectations and results were generally cohesive
Luckywon
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Luckywon »

Bogle_Bro wrote: Thu May 07, 2020 10:57 am I underwrote a lot of ppp loans, and what 2.5mo was in the clients minds OFTEN did not match our analysis of their paperwork for various reasons.

common examples:

sole props wanted gross receipts but we only approved them for line 31 net income

Companies requested amounts for independent contractors who were used regularly but not technically employees

Companies provided unclear & jumbled payroll records as opposed to 2019 940s

Also, frankly, with the sheer volume and urgency, im sure there was plenty of human error in the calculations on the banks side
Caught my eye you underwrote PPP loans. If you would share how you considered 401k employee deferral, catchup, and employer profit sharing contributions in the calculation, I would appreciate it greatly. I'm assuming they are all part of payroll. Were any of those subtypes of contributions subject to the 100k limitiation in aggregate with wages? I'm thinking this will have relevance with respect to the rules for forgiveness.
TIA.
WildCat48
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by WildCat48 »

We received 100%, $1.4M in total.
Bogle_Bro
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

Luckywon wrote: Thu May 07, 2020 11:20 am
Bogle_Bro wrote: Thu May 07, 2020 10:57 am I underwrote a lot of ppp loans, and what 2.5mo was in the clients minds OFTEN did not match our analysis of their paperwork for various reasons.

common examples:

sole props wanted gross receipts but we only approved them for line 31 net income

Companies requested amounts for independent contractors who were used regularly but not technically employees

Companies provided unclear & jumbled payroll records as opposed to 2019 940s

Also, frankly, with the sheer volume and urgency, im sure there was plenty of human error in the calculations on the banks side
Caught my eye you underwrote PPP loans. If you would share how you considered 401k employee deferral, catchup, and employer profit sharing contributions in the calculation, I would appreciate it greatly. I'm assuming they are all part of payroll. Were any of those subtypes of contributions subject to the 100k limitiation in aggregate with wages? I'm thinking this will have relevance with respect to the rules for forgiveness.
TIA.
The 100k max is for cash compensation only, so it would include profit sharing, but not include benefits paid by the employer to employees like 401k match

If the 401k contributions were employees regular comp that they chose to contribute toward their defined benefit plan, that would count as cash comp toward the 100k max

Ex:
80k salary + 30k profit share is capped at the 100k max + costs associated with benefits provided by employer
Jesa
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Jesa »

Wow, I was not aware you could profit share with this money.
Luckywon
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Luckywon »

Bogle_Bro wrote: Thu May 07, 2020 12:22 pm

The 100k max is for cash compensation only, so it would include profit sharing, but not include benefits paid by the employer to employees like 401k match

If the 401k contributions were employees regular comp that they chose to contribute toward their defined benefit plan, that would count as cash comp toward the 100k max

Ex:
80k salary + 30k profit share is capped at the 100k max + costs associated with benefits provided by employer
Thanks Bogle_Bro.

I have an S-corp paying me W-2, K-1 and also have a solo 401k where I make employee deferral, catch-up and 401k employer profit sharing contributions.

If I pay myself:

8/52 * $100,000 in W-2 salary = $15,385.

Then do you think I can also make any 401k contributions that count as part of the 75 % payroll requirement? And which the three types of 401k contributions would count?

Sorry I am slow on the uptake-this is all like Greek to me.
Bogle_Bro
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

Jesa wrote: Thu May 07, 2020 12:39 pm Wow, I was not aware you could profit share with this money.
Please note that im talking about calculating and approving the initial loan amount, not the guidelines to assure a specific loan will meet the requirements for forgiveness at a later time, which is its own animal that I would hesitate to make general comments about.

Ex: a 1 person sole proprietship on their schedule c has gross receipts of 100k and expenses of 50k. We will base the numbers on their net profit, which is line 31, which is basically their profit share

Ex2: a small limited partnership or scorp with a couple or few employees paid themselves positive distributions on their K1s but no salary. We will use the distributions to calculate the ppp loan amount
Last edited by Bogle_Bro on Thu May 07, 2020 1:35 pm, edited 2 times in total.
kmurp
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by kmurp »

Bogle_Bro wrote: Thu May 07, 2020 12:22 pm
Luckywon wrote: Thu May 07, 2020 11:20 am
Bogle_Bro wrote: Thu May 07, 2020 10:57 am I underwrote a lot of ppp loans, and what 2.5mo was in the clients minds OFTEN did not match our analysis of their paperwork for various reasons.

common examples:

sole props wanted gross receipts but we only approved them for line 31 net income

Companies requested amounts for independent contractors who were used regularly but not technically employees

Companies provided unclear & jumbled payroll records as opposed to 2019 940s

Also, frankly, with the sheer volume and urgency, im sure there was plenty of human error in the calculations on the banks side
Caught my eye you underwrote PPP loans. If you would share how you considered 401k employee deferral, catchup, and employer profit sharing contributions in the calculation, I would appreciate it greatly. I'm assuming they are all part of payroll. Were any of those subtypes of contributions subject to the 100k limitiation in aggregate with wages? I'm thinking this will have relevance with respect to the rules for forgiveness.
TIA.
The 100k max is for cash compensation only, so it would include profit sharing, but not include benefits paid by the employer to employees like 401k match

If the 401k contributions were employees regular comp that they chose to contribute toward their defined benefit plan, that would count as cash comp toward the 100k max

Ex:
80k salary + 30k profit share is capped at the 100k max + costs associated with benefits provided by employer
By profit sharing do you mean money directly placed into an employees’ retirement account or a check to the employee subject to income tax?
Bogle_Bro
Posts: 184
Joined: Sat Mar 31, 2018 11:43 am
Location: Frisco Texas, Mortgage Banker & Attorney

Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

kmurp wrote: Thu May 07, 2020 12:58 pm
Bogle_Bro wrote: Thu May 07, 2020 12:22 pm
Luckywon wrote: Thu May 07, 2020 11:20 am
Bogle_Bro wrote: Thu May 07, 2020 10:57 am I underwrote a lot of ppp loans, and what 2.5mo was in the clients minds OFTEN did not match our analysis of their paperwork for various reasons.

common examples:

sole props wanted gross receipts but we only approved them for line 31 net income

Companies requested amounts for independent contractors who were used regularly but not technically employees

Companies provided unclear & jumbled payroll records as opposed to 2019 940s

Also, frankly, with the sheer volume and urgency, im sure there was plenty of human error in the calculations on the banks side
Caught my eye you underwrote PPP loans. If you would share how you considered 401k employee deferral, catchup, and employer profit sharing contributions in the calculation, I would appreciate it greatly. I'm assuming they are all part of payroll. Were any of those subtypes of contributions subject to the 100k limitiation in aggregate with wages? I'm thinking this will have relevance with respect to the rules for forgiveness.
TIA.
The 100k max is for cash compensation only, so it would include profit sharing, but not include benefits paid by the employer to employees like 401k match

If the 401k contributions were employees regular comp that they chose to contribute toward their defined benefit plan, that would count as cash comp toward the 100k max

Ex:
80k salary + 30k profit share is capped at the 100k max + costs associated with benefits provided by employer
By profit sharing do you mean money directly placed into an employees’ retirement account or a check to the employee subject to income tax?
I am using the term "profit share" as in a partnership distribution that would show up on a K1
kmurp
Posts: 373
Joined: Fri Jun 01, 2007 1:53 pm

Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by kmurp »

Thank you for your prompt reply regarding the profit sharing.
Bogle_Bro
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Location: Frisco Texas, Mortgage Banker & Attorney

Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Bogle_Bro »

Luckywon wrote: Thu May 07, 2020 12:48 pm
Bogle_Bro wrote: Thu May 07, 2020 12:22 pm

The 100k max is for cash compensation only, so it would include profit sharing, but not include benefits paid by the employer to employees like 401k match

If the 401k contributions were employees regular comp that they chose to contribute toward their defined benefit plan, that would count as cash comp toward the 100k max

Ex:
80k salary + 30k profit share is capped at the 100k max + costs associated with benefits provided by employer
Thanks Bogle_Bro.

I have an S-corp paying me W-2, K-1 and also have a solo 401k where I make employee deferral, catch-up and 401k employer profit sharing contributions.

If I pay myself:

8/52 * $100,000 in W-2 salary = $15,385.

Then do you think I can also make any 401k contributions that count as part of the 75 % payroll requirement? And which the three types of 401k contributions would count?

Sorry I am slow on the uptake-this is all like Greek to me.
I can only really comment with confidence about the intitial loan disbusement calculations as I am not involved or trained in the forgiveness stage of these loans, but my best guess would be all three retirement contributions would count toward the 75% requirement. I'd recommend speaking to a small business consultant at your bank directly to confirm

My day job at the bank is as a high net worth loan officer, the bank just redeployed me temporarily due to unprecedented demand to get ppp loans disbursed as quickly as possible. All hands on deck. Im off the project now.
Luckywon
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Luckywon »

Bogle_Bro wrote: Thu May 07, 2020 1:30 pm
I can only really comment with confidence about the intitial loan disbusement calculations as I am not involved or trained in the forgiveness stage of these loans, but my best guess would be all three retirement contributions would count toward the 75% requirement. I'd recommend speaking to a small business consultant at your bank directly to confirm

My day job at the bank is as a high net worth loan officer, the bank just redeployed me temporarily due to unprecedented demand to get ppp loans disbursed as quickly as possible. All hands on deck. Im off the project now.
Will do. Appreciate very much the information you've provided-very helpful. Thank you!
Elysium
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Joined: Mon Apr 02, 2007 6:22 pm

Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Elysium »

I was approved and funded, but only at 75% of what I applied (2.5x Monthly payroll). After several e-mail communications and pulling my hair out trying to understand why they did that, all I get was the repeated copy/paste messages from the generic SBA guidelines on calculations.

In the end, I guessed what happened, I uploaded both 2019 940 and the quarterly 941's (which was not needed, but stupid on my part to volunteer more), and the 941 figures are after 401(k) contributions, the tally of those 4 when taken as salary x 2.5 times matched what I got. They just deducted the 401(k) contributions (not employer match) out of the payroll. There is no other explanation. How dumb is this, anyway, since they submitted that to SBA and got approved, there was nothing I could do other than accept. People who simply gave Form 940 were smarter I think.
Jefferson
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Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by Jefferson »

We got 100%. But I kept it simple. 2.5x avg month of gross pay only. I sent a 100+ page pdf of our 2019 payroll report with totals at the bottom.

EDIT- I talked to the underwriter. He told me that they were letting any amount through that was within 7% +/- of their calculations. I was in the first round and used a mid sized regional bank with which I already had a significant banking relationship.
theplayer11
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Joined: Tue Jul 22, 2014 8:55 pm

Re: PPP - For those getting approved, what was the % given to you out of possible total?

Post by theplayer11 »

100% and I'm seasonal. Loan included i401k employer contributions prorated for just the 4 months along with HSA contribution, health care premiums. All prorated 4 months. I doubt all will be forgiven.
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