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Case Study: COVID-19 Relief Benefits

Over the past year our team has worked with numerous companies, regionally and throughout the United States, in regard to the Paycheck Protection Program (PPP) and the Employee Retention Credit (ERC). When the American Rescue Plan Act passed in March, we saw another opportunity for our clients to take advantage due to the increased access to PPP loans for organizations as well as an extension of the ERC to December 31, 2021.

While there are many COVID-19 relief benefits available, the hard part is understanding which is right for your business and how to go about getting the maximum benefit. The right choice is dependent upon several different criteria, as defined by the Families First Coronavirus Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Consolidated Appropriations Act, and the American Rescue Plan Act. Our team can help you understand and compare the benefits available to you so you can make the right decision for your organization and not miss an opportunity for significant cashflow advantages from both the PPP and ERC.

Take one of our clients for example. As we consulted with one of our regional nonprofit organizations which has 13 full-time employees and numerous part-time faculty and staff, they requested assistance to guide them through both the PPP loan application and forgiveness process as well as calculation and assistance with ERC.

Challenge

This organization knew they needed to apply for the PPP loans, but understanding all the loan application changes and receiving full loan forgiveness left them concerned about the risk of missing out due to an incorrect or incomplete application.

Solution

McKonly & Asbury’s team guided them through the PPP1 and PPP2 loan process to determine eligibility, compile necessary documentation, and coordinate the PPP forgiveness. On top of the PPP applications and forgiveness, our team also knew recent COVID-19 relief legislation not only extended the ERC but made several changes to expand eligibility, increase savings, and added a retroactive provision for PPP loan recipients. We suggested they act to uncover the savings in this opportunity as well, so we made the necessary calculations, compiled required documentation, prepared all filings, and submitted to the IRS.

Results

$760,000 in PPP loans and $137,000 in 2020 ERC refunds, with a potential for an additional $200,000 in 2021!

This example is one of many organizations that have benefited from the depth and expertise of our team. Overall, we have assisted with securing over $10M in PPP funds and corresponding forgiveness as well as over $1M in ERC refunds.

Examples of Clients and Impact

Company Location Employees Qualification PPP Benefit ERC Benefit
Performing Arts PA 30 School shut down and limited business operations $760k $237k
Youth Sports PA 15 Shutdown due to government orders. Partial opening of activities and events $40k $10K
General Contractor PA 30 Essential business – Temporary shutdowns and supplier slow downs $650k $125K
Franchise Service MD 30 Temporary Closure. Impact due to type of business and service $150k $30K
Construction Supplier PA 35 Temporary closure and supply chain interruptions $350k $105k
General Contractor PA 50 Essential business – Temporary shutdowns and supplier slow downs $675K $100K

 

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If you and your business need assistance, don’t go at it alone. The recent changes discussed previously allow more businesses to reap these benefits; however, there are detailed rules to follow, and different scenarios must be calculated. Businesses need to get this right to reap the greatest benefits.

To ensure you are submitting the correct PPP information and receiving the highest forgiveness amount possible, reach out to David Blain, Partner at dblain@macpas.com or visit our PPP Loan Consulting services webpage.

For assistance with the 2020 or the 2021 Employee Retention Credit, reach out to Mark Heath, Partner at mheath@macpas.com or visit our Employee Retention Credit services webpage to review your business, determine eligibility, and the amount of potential savings.

 

About the Author

David Blain

David is a Partner with McKonly & Asbury. He has a diverse background with experience in both private industry and public accounting, having worked for five years for an international public accounting firm and five years in private i… Read more

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