Jan. 19, 2021 COVID Round Tables (Part 7)

Returning today is Gene Marks from the Marks Group PC. He is an author, a speaker on small business expertise, and a CPA. He has presented at Scaling New Heights. He was one of our guests on the Round Tables back in March for the CARES Act when we were trying to figure out what was happening with coronavirus relief, and previously spoke at our January 5 Round Tables. He writes regularly for The Hill, the Philadelphia Inquirer, Forbes, Entrepreneur Magazine, and The Guardian, and appears regularly on MSNBC, CNBC, Fox Business and Fox News. He’s the author of six books on business management and comes to us today compliments of our friends at Patriot Software, a leading payroll provider which works with QuickBooks Integrated Payroll.

Joe Woodard: So we've got an interesting question here about projections on depletion of the funds. Now I know another round is coming from the Biden administration that says there will be trillions available, but I don't know how much of that is earmarked for small busines. You may have some insight into that too. But if you have a seasonal business that spins up every spring, and if you wait until March to file for this, do you risk losing money? 

Gene Marks: Yes, I think you do. I can take a couple things about the new stimulus program that the President Biden is proposing as it has to do with small businesses. He's very vague on what it is and he's said that we want to provide funding for businesses that need it. It'll be far more targeted towards lower income and moderate areas and may also focus specifically on minority owned businesses this time around. Given the fact that we had so much money left over from the last PPP round, I'm not sure whether there's going to be a PPP 4.0 with the next Biden stimulus plan. So I would take the money now, to the extent that you can use it. 

Joe Woodard: The existing short form is 3508-S but still has the maximum of 50 on it. So 3509 is the loan necessity form.  

For a schedule C, what if the client ends up claiming less 2020 income than they estimated when applying for the PPP loan? 

Gene Marks: You take it up with your lender. I don't really know. The issue is going to come down to forgiveness. I mean, the idea behind the PPP application and then the forgiveness process was that you apply based on your payroll numbers and then you then get forgiveness based on your payroll numbers and some non-payroll expenses. And it should wash if you made your estimates. Okay, so if you overestimated your loan, theoretically, you would have to apply for less forgiveness because your actual payroll would be less than that. Maybe it's made up of non-payroll expenses that make up the difference. Maybe not. But I don't think I would worry about it at all. You made your estimates based on the best information that you had at the time, you represented that you did this in good faith and your banker knew that when you were estimating the numbers. You can't predict the future; you don't know what's going to happen. So you did the best job that you possibly could. And it turned out to be what it turned out to be. 

Round Table Participant: When comparing the quarter and 2020 to 2019, can it be any three-month period, or does it have to be a calendar quarter? 

Gene Marks: It must be a calendar quarter. I think the biggest reason why is that the SBA wants to avoid businesses picking and choosing their worst three months. So they're trying to make it consistent across the board. We're telling our clients is that it's the calendar quarter. 

Round Table Participant: Can you apply for the second PPP loan if you received funds from the first round and repaid the first round? 

Gene Marks: Yes. If you use up all the funds from the first round, even if you received forgiveness or you paid back the loan, you can certainly go and apply for a second loan. 

Joe Woodard: We are out of time. Any questions that didn't get answered are probably few and far between here, Gene. Thank you for that. So I'm going to give you the final word. Is there anything that you want to say to bookkeepers, CPAs and tax preparers during this difficult time? 

Gene Marks: We're providing a service to our clients, so whatever help that we can provide our clients outside of just doing the books or tax returns is the most important thing. And I think that there are certain tax benefits they should be aware of, like the NOL carryback, the ERTC, and the SBA loans, including the forgivable loans, Section 7A and 504 loans. I bet if you went to your clients and told them about these loans they would be very, very interested, because they are financial benefits. So bring that to them and help them go through that process. They will be very, very happy that they're working with you. 

Joe Woodard: And remember a happy client is a paying client, but only if you give them a price and you charge for it.   

Gene, thank you so much for being with us, you're incredible. Thank you. Thank you, Patriot Software, for bringing us Gene and Nigel and for all of the support you've provided. Thanks, everybody. 

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