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2020 COVID-19 CARES & FFCRA Update: April 24, 2020

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Here's the latest update on COVID 19 related PPP, Disaster Loans and sick leave for businesses.

SBA PROGRAM UPDATE as of 4.23.2020

  • The SBA website shows a notice of ‘Lapse in Appropriations’ for both PPP and EIDL
  • Funds available for PPP were exhausted in 13 days and EIDL program ran out of money shortly thereafter
  • Many PPP applicants were shut out at their bank
  • Most just received word that their application was ‘accepted’ at the bank. Then no further communication on loan being approved or even submitted to SBA
  • SBA previously advised that it may take 2-3 weeks before any EIDL loan would be reviewed so some of these applications may still be pending


  • Simply put, the legislation was rushed, and it took time to understand how the program was supposed to work causing delays at most banks
  • Many banks were criticized for prioritizing loan applications to customers that had an outstanding debt with the bank and/or deposits
  • Small banks were big winners in Round 1 as 20% of loans were processed by banks with less than $1B in assets and 60% from banks with $10B or less in assets
  • There was a great disparity among states in approved loans


  • On Tuesday 4/21 the Senate approved a bill for an additional $310 Billion for PPP which is expected to go to the House for confirmation on Thursday 4/23
  • $60 Billion has been set aside specifically for smaller lending institutions like credit unions and community banks to get more funds to small businesses – a short coming in Round 1
  • Some legislators have been concerned about lack of oversight with this program so further delays are possible
  • No date has been set for a reopening of PPP loans
  • It is unlikely there will be a Round 3


  • Deferring payroll taxes – 50% until 12/31/21 and 50% due on 12/31/22
  • Ability to carry back Net Operating Loss in 2018,2019 and 2020 for up to 5 years
  • Tax credit of 50% of payroll taxes on first $10,000 wages per employee if sales have dropped by 50% from prior period
  • FFCRA - Sick leave for employees covered by tax credits


  • EIDL – Disaster Loans up to $2 Million at 3.75% available through SBA. This loan can be used for any purpose except growth
  • Emergency Grant up to $10,000 – within 3 days
  • PPP – Payroll Protection Plan loan amount based on 2.5 times monthly average wages & benefits up to a maximum of $10 Million
  • PPP loan will be forgiven if you maintain your headcount and spend at least 75% of loan proceeds on wages & benefits


  • Circumstances are changing daily so you need to stay informed and ready to act
  • The time to complete your loan applications was yesterday
  • If you were not approved in Round 1 of PPP consider submitting a second application to a community bank or credit union
  • Seek guidance from a financial expert. Optima's SBA Task Force is here to help from the loan application, sourcing the right bank and setting up proper accounting contact


  • Open a separate bank account to monitor and control all funds received under PPP and to track their disbursement
  • Create new accounts in payroll, rent, utilities etc. by adding PPP to the name so you can track expenditures that qualify for loan forgiveness
  • Prepare a new 8 week forecast to ensure all expenditures are meeting guidelines set forth during the covered period under PPP
  • Create new accounts in payroll under FFCRA as you are not allowed to include these in your pending PPP forgiveness calculation


  • Amount forgiven is based on % of head count you retain compared to prior period either 1/1/20-2/29/20 or 2/15/19-6/30/19
  • If your head count drops more than 25% you lose all forgiveness
  • Loan forgiveness applies to the 8 weeks during the covered period (beginning when you receive the loan) ending 6/30 which means loans after May 5th may not enjoy full forgiveness


  • Up to $2 Million at 3.75% can be paid back over 30 years
  • You can use this loan for all business operations except growth
  • You can apply for emergency grant up to $10,000 to be disbursed within 3 days
  • Loan is through SBA and comes with credit check, potential guarantees etc. associated with conventional loans
    There is no forgiveness on this loan – you do have to pay it back

Families First Coronavirus Response Act (FFCRA)

  • Provides government paid sick leave due to COVID-19 for companies with 500 or fewer employees
  • If someone is sick with COVID-19, or caring for a relative, they are eligible for up to 80 hours of sick leave pay from their employer under EPLSA
  • Rate of pay varies depending on reason with a maximum of $511/day if employee is sick and $200/day if caring for a relative
  • The Expanded Family and Medical Leave Act (E-FMLA) provides an additional 10 weeks of coverage up to $200/day with a $10,000 maximum

Additional Key Provisions

  • Remember CARES is not just about loans
  • Defer all of your 2020 payroll taxes during this calendar year. Pay 50% of the deferral on 12/31/2021 and the remaining 50% on 12/31/2022. Deferral is not available for employers receiving loan forgiveness under PPP
  • Payroll tax credit of 50% on payroll taxes of first $10,000 wages of each employee if you have a sales reduction of 50% or greater compared to the prior year
  • Carry back any 2018-2020 Net Operating Loss up to 5 years

Moving Forward

  • Evaluate current operations and create a specific plan how you and your employees can get the most from CARES & FFCRA
  • Stay up to date with announcements as the environment is changing rapidly
  • Make sure you have informed employees of all benefits afforded them under FFCRA
  • Put new accounting procedures in place to track all COVID-19 related funding and disbursements


You can contact Taylor Gibson at
If you would like to learn more about Optima Office please visit
If you would like to speak to someone on the Optima team, please call us at 858-283-1234


Material contained in this presentation is offered in summary form for informational purposes only. If you have questions about specific details of either CARES or FFCRA, please


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