PPP loan documentation

TimKeogh · ‎April 03, 2020

I work for a fintech that has a lending platform to get banks to originate PPP loans. We are scrambling to help borrowers produce the documentation the SBA wants. Could someone list the steps a QB user would take to run a detailed payroll report? thank you for helping....

Nick_M · ‎April 03, 2020

Good evening, STJenni.

You'll need to complete the SBA's Paycheck Protection Program sample application, which can be found in this article below:

What is the Paycheck Protection Program (Underneath the "How to apply for the PPP")

Once completed, submit the document to any existing SBA-approved lender. Federally insured depository institutions, federally insured credit unions and Farm Credit System Institutions. Check with your bank to find out if they're participating in the program.

When you apply, the lender will consider both personal credit score and FICO score. You will need the following to apply:

- Articles of incorporation for each borrowing entity

- By-laws or operating agreement for each borrowing entity

- Copies of each owner's driver's license

- Payroll expense verification

- Certification that all employees live in the United States

- A detailed list of employees who do not live in the U.S., with corresponding salaries

- A trailing 12-month profit and loss statement

- Proof of expenses such as rent and mortgage payments, interest payments on debt and utilities.

You'll also need to provide payroll data during the eight weeks after the loan is finalized. If you use accounting software or a payroll processor, this data will be easy to access. Otherwise, you need to provide documentation for:

-Gross Pay: Including gross wages as well as paid time off, vacation pay, and family medical leave pay for the last 12 months.

-Tax withholding: Last 12 months of federal, state and local income taxes withheld.

-2019 FUTA taxes: IRS forms 940 and 941 for federal unemployment taxes.

-1099s: 2019 payments to independent contractors

-Health insurance premiums: Company-paid premiums for group health insurance for the last year

-Retirement plan funding: business contributions to employee retirement plans over the last 12 months.

Don't forget, your business will still need to withhold federal and state income taxes, Medicare, and Social Security.

I hope all this information helps to get you going in the right direction. If you need more help with anything else, let me know.

Thank you and have a great weekend!

View solution in original post

john-pero · ‎April 04, 2020

@hknouff wrote:

Hello Nick,

but we NEED the official payroll document to be generated by quickbooks in order to complete our applications through our own banks where we have our business accounts.

Not really. Many banks, mine included, have forwarded an excel document into which you INSERT your own numbers but this is for calculation purposes only. The application form itself requires two numbers, the average monthly payroll and the FTE (full time equivalent employee number)

A single report pulled from within QB WILL NOT be able to include your group health care premiums UNLESS you designate those as a payroll item and not just insurance expense, which it is. The original release of the application would have implied that all you had to do was take your full payroll for the past 3-6 months and dived by 3 or 6. In any event HERE is the procedure I used to produce the required numbers and you can do it almost all from one form. NOTE: I did take same report, change display columns from employees to months and did use the provided excel from my bank

If anyone wants a copy of the excel and your bank did not give you one send me a PM and I will be glad to forward one

Follow along as you "play" at home

1. Run Payroll Summary (it lists every employee with hours and types of pay and all deductions) adjust the date range to past 12 months

2. this is key for simplicity> EXPORT to EXCEL

3. Look for the row entitled Adjusted Gross Pay

4. In the Hours column for any employee where the total is greater than 2080, reduce that to 2080. In the total column find the total of all hours for all employees and divided by 2080. Now round that number DOWN to the next WHOLE number (even if it came out 10.999 that is only 10) and this is your FTE for the year and is the same as if you calculated it each and every month.

5. In the totals column for each employee, and in same row (or in the row Total Gross Pay depending on IF anyone can find a clear definition that it is on SS wages and not Federal wages - but to be on safe side I would go with the AGP) - REDUCE any total over 100,000 to 100,000

6. Clear content from employee deductions rows where items are NOT to be deducted, such as state and local WITHHOLDINGS, child support, etc

7. clear content from final section employer additions for FUTA, 401k, workers comp, REVERSE entries for employer match of SS and medicare - YES this reduces your payroll BELOW net paid to employees but my gut understanding of the reason that employer additions are deducted from taxable wages is that these loans are A> forgivable and B> NOT TAXABLE TO US

8. Add group health care premiums YOU paid (by leaving the reduction in the employee deduction section you are properly claiming only the company cost

9. the lower right of your form will have your total for "Adjusted" Net Pay, to which you add the "Adjusted " employer taxes.

10. Divide that number by 12. There is no need to calculate the pay for each and every month and then average because the end result is exactly the same. This is your monthly average payroll

View solution in original post

dbbender · ‎April 03, 2020

Yes - I have been on phone with QB Priority Circle and it seems no body there knows what is going on? How come providers like Paychex, Gusto and others have their system ready to generate PPP compliant reports as of last night, but yet, I cannot get QB Payroll to provide any information on how to do this or how they are going to roll out reports that are PPP compliant.

Can someone in QB Payroll please provide a solution other than just standard guidance on the PPP program and all of us scramble to create makeshift reports in QB to submit for the application.

mb3 · ‎April 03, 2020

Hi - my bank provided me with a excel template/calculator which asks for the following. In QB, I pulled the Payroll Summary by Employee and changed the date range to the range that I needed and changed the Display Columns by Employee to Display Columns by Month. Hope this helps!

2019 Monthly Payroll Costs (U.S.-based employees only)
Payroll Costs
Salaries, wages, commissions and tips
Vacation, parental, family, medical and sick leave
Payment required for group healthcare benefits
Payment of any retirement benefit
Allowance for dismissal/separation
State or local tax assesed on compensation
Sum of Gross Payroll Costs

Excluded Costs
Monthly amount of annual salaries over $100,000
Taxes imposed or withheld under chapter 21, 22, or 24 of the IRS
Any compensation of an employee whose principal residence is outside of the US
Sum of Excluded Costs

Net Applicable Payroll Costs (Gross Payroll Costs less Excluded Costs)

2019 Average Monthly Payroll (Average of Net Applicable payroll costs)

Loan Amount = 2019 Avg Monthly Payroll Multiplied by 2.5

mb3 · ‎April 03, 2020

ADP has already created a standard report for this as well.....

Nick_M · ‎April 03, 2020

Hello, everyone.

While I know some of you are frustrated with phone queues, wait times and what seems like a lack of answers, just know that we are working hard to launch an application and funding process for the Paycheck Protection Program directly within QuickBooks to help out small businesses.

I know with all the changes has also came a lot of frustration and uncertainty. We're working hard to ease those feelings with the launch an application and funding process for the Paycheck Protection Program directly within QuickBooks to help small businesses.

In the meantime, Id like to provide some informative articles.

- How the stimulus package benefits small businesses and self-employed.

- What is the Paycheck Protection Program (PPP)

Thank you for your patience while we work to get everyone on the same page. If you have any other questions, reach out here.

Offtheshelfreps · ‎April 03, 2020

Thank you. Do you know when this will be available?

MaulikH · ‎April 03, 2020

Hey there, Oftheshelfreps.

You can apply as early as today.Today April 3, 2020, small businesses and sole proprietorships can apply for these loans. On April 10, 2020, independent contractors and self-employed individuals can apply. We're working constantly to update you with any new developments. If anything else please reach out to me.

STJenni · ‎April 03, 2020

Can you clarify? It sounds like you're saying that QB isn't developing the reports that are needed so that that application has to go through them or do it the hard way. Is that the case?

Nick_M · ‎April 03, 2020

Good evening, STJenni.

You'll need to complete the SBA's Paycheck Protection Program sample application, which can be found in this article below:

What is the Paycheck Protection Program (Underneath the "How to apply for the PPP")

Once completed, submit the document to any existing SBA-approved lender. Federally insured depository institutions, federally insured credit unions and Farm Credit System Institutions. Check with your bank to find out if they're participating in the program.

When you apply, the lender will consider both personal credit score and FICO score. You will need the following to apply:

- Articles of incorporation for each borrowing entity

- By-laws or operating agreement for each borrowing entity

- Copies of each owner's driver's license

- Payroll expense verification

- Certification that all employees live in the United States

- A detailed list of employees who do not live in the U.S., with corresponding salaries

- A trailing 12-month profit and loss statement

- Proof of expenses such as rent and mortgage payments, interest payments on debt and utilities.

You'll also need to provide payroll data during the eight weeks after the loan is finalized. If you use accounting software or a payroll processor, this data will be easy to access. Otherwise, you need to provide documentation for:

-Gross Pay: Including gross wages as well as paid time off, vacation pay, and family medical leave pay for the last 12 months.

-Tax withholding: Last 12 months of federal, state and local income taxes withheld.

-2019 FUTA taxes: IRS forms 940 and 941 for federal unemployment taxes.

-1099s: 2019 payments to independent contractors

-Health insurance premiums: Company-paid premiums for group health insurance for the last year

-Retirement plan funding: business contributions to employee retirement plans over the last 12 months.

Don't forget, your business will still need to withhold federal and state income taxes, Medicare, and Social Security.

I hope all this information helps to get you going in the right direction. If you need more help with anything else, let me know.

Thank you and have a great weekend!

STJenni · ‎April 03, 2020

We all know the information required. What we need is a report in Quickbooks Desktop Payroll and Quickbooks Online Payroll that will give us that information. All of the other major payroll providers have developed and released a one step report to calculate the payroll cost. Will Intuit provide a similar report, or will we have to continue to manually figure it?

hknouff · ‎April 03, 2020

Hello Nick,

Thanks for the info, but on behalf of the business owners who are posting in this forum, we're telling you we already know all of that, but we NEED the official payroll document to be generated by quickbooks in order to complete our applications through our own banks where we have our business accounts.

As the filing deadline for taxes has been extended into the Summer, many business owners have not yet processed their 2019 taxes and are being directed to instead use this official document called the "Payroll Processor Record" or also being called the "Cares SBA PPP Report" which needs to be sourced from an official source like Quickbooks.

There is a sense of urgency here... so if someone could tell us that they are (A) aware of the required document we're requesting, and (B) when they are planning to generate these for their customers.

It's pretty disconcerting that the clock is ticking and you guys don't have this available in time for the opening of the application.

dg131 · ‎April 04, 2020

The OB team keeps ignoring the question...

john-pero · ‎April 04, 2020

@hknouff wrote:

Hello Nick,

but we NEED the official payroll document to be generated by quickbooks in order to complete our applications through our own banks where we have our business accounts.

Not really. Many banks, mine included, have forwarded an excel document into which you INSERT your own numbers but this is for calculation purposes only. The application form itself requires two numbers, the average monthly payroll and the FTE (full time equivalent employee number)

A single report pulled from within QB WILL NOT be able to include your group health care premiums UNLESS you designate those as a payroll item and not just insurance expense, which it is. The original release of the application would have implied that all you had to do was take your full payroll for the past 3-6 months and dived by 3 or 6. In any event HERE is the procedure I used to produce the required numbers and you can do it almost all from one form. NOTE: I did take same report, change display columns from employees to months and did use the provided excel from my bank

If anyone wants a copy of the excel and your bank did not give you one send me a PM and I will be glad to forward one

Follow along as you "play" at home

1. Run Payroll Summary (it lists every employee with hours and types of pay and all deductions) adjust the date range to past 12 months

2. this is key for simplicity> EXPORT to EXCEL

3. Look for the row entitled Adjusted Gross Pay

4. In the Hours column for any employee where the total is greater than 2080, reduce that to 2080. In the total column find the total of all hours for all employees and divided by 2080. Now round that number DOWN to the next WHOLE number (even if it came out 10.999 that is only 10) and this is your FTE for the year and is the same as if you calculated it each and every month.

5. In the totals column for each employee, and in same row (or in the row Total Gross Pay depending on IF anyone can find a clear definition that it is on SS wages and not Federal wages - but to be on safe side I would go with the AGP) - REDUCE any total over 100,000 to 100,000

6. Clear content from employee deductions rows where items are NOT to be deducted, such as state and local WITHHOLDINGS, child support, etc

7. clear content from final section employer additions for FUTA, 401k, workers comp, REVERSE entries for employer match of SS and medicare - YES this reduces your payroll BELOW net paid to employees but my gut understanding of the reason that employer additions are deducted from taxable wages is that these loans are A> forgivable and B> NOT TAXABLE TO US

8. Add group health care premiums YOU paid (by leaving the reduction in the employee deduction section you are properly claiming only the company cost

9. the lower right of your form will have your total for "Adjusted" Net Pay, to which you add the "Adjusted " employer taxes.

10. Divide that number by 12. There is no need to calculate the pay for each and every month and then average because the end result is exactly the same. This is your monthly average payroll

RonK · ‎April 04, 2020

How can I get a copy of the excel sheet you reference in your post.

Thanks

Ron

[email address removed]

RonK · ‎April 04, 2020

How can I get a copy of the excel spreadsheet you reference in your post?

hknouff · ‎April 04, 2020

Thanks. I've read those intructions abuut 30 times over. I have no employees as a Single Memeber LLC so I understand every step except that my bank isn't providing me with any documents, and is requesting this official doc from my accounting software. I don't know what my "payroll amount" is supposed to be as an SMLLC according to their rules. Would be awesome if QB could generate this doc that banks are asking for and tell me what "payroll" amount I should be reporting in accordance with the SBA, but no guidance for my situation to be found so far.

Anywho, when I called my bank yesterday, the teller didn't know what the PPP even was, even though the bank has an online app. The downside of living in a small town... if the CEOs barelt even know what's going on, how is a bank teller going to?

Anyway thanks for the input.

Char-Heyer · ‎April 04, 2020

Hi, John-pero!

Thank you for your helpful post.

How can I get a copy of the excel sheet you reference in your post?

Thank you,

Charlotte

([email address removed])

Char-Heyer · ‎April 04, 2020

Hi, John-pero!

Thank you for your helpful post.

How can I get a copy of the excel sheet you reference in your post?

Thank you,

Charlotte

SpencerF · ‎April 05, 2020

When will the report be available. This is the first item my bank asked for. I hope you have it ready for Monday 4-6-20. We are already days behind this giant crush of applicantions.

DelrayBchBroker · ‎April 05, 2020

John,

Could you possibly forward me a copy of the banks Excel sheet? It would be much appreciated.

Thanks,

Jeffrey Johnson

[email address removed]

Susana1305 · ‎April 05, 2020

I John,

May I please get a copy of the spreadsheet your bank provided to run the numbers?

thanks

john-pero · ‎April 05, 2020

Overnight (from Saturday to Sunday) the payroll calculator changed and more importantly does NOT have any spots to DEDUCT anything other than wages paid to foreigners and wages over 100k. So in my previous post you can ignore the section on reducing payroll costs by the amount of payroll taxes.

My bank's checklist, however, asks for W2 for each employee for 2019, all 941, and a payroll report for 14 months, Jan19 to Feb 20. The standard (at least in desktop) Payroll Summary report will list each employee, all wages, all deductions, and employer taxes and 401k match. I also ran 14 monthly payroll summary reports just in case they need them.

Jay Bolt · ‎April 05, 2020

My payroll summary report is huge and I can't down load it into excel since excel is limited to 256 columns I have 426. Any suggestions?

Jay Bolt · ‎April 05, 2020

My payroll summary report is huge and excel is limited to 256 columns I have 426. Any suggestions on how to get around this issue?

Thanks

Rico-NJ · ‎April 06, 2020

HI:

Can I get a copy of the excel sheet

Thanks

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