The Atlanta Business Chronicle recently published an article that dives into the Paycheck Protection Program (PPP) requirements and whether businesses will be able to meet the obligation of using 75% of the loan proceeds on payroll costs. The publication turned to Stephen Klein, Managing Director of Bennett Thrasher’s Bankruptcy & Restructuring practice, for his insight on whether companies that offer bonuses to employees will see greater forgiveness from the Small Business Administration (SBA).
While acknowledging the gray area and uncertainties in the current PPP guidelines, Klein believes that the SBA will come down in favor of allotting extra pay to employees – in the form of bonuses or incentives – so long as they don’t exceed other caps, such as $100,000 per employee on an annualized basis.
“We do think that’s what they are going to do. We do think they are going to allow for irregular incentive-based compensation during this hard time,” said Klein. “If you read the statute, it doesn’t say you can’t do that.”
For the full article, click here.
We’re Here to Help
Preparing documentation and understanding the loan forgiveness process for your business can be overwhelming and confusing. The experts of Bennett Thrasher’s Bankruptcy & Restructuring practice have developed a custom tool to help you calculate your likelihood for forgiveness, based on specific inputs and decisions. For more information, contact Stephen Klein or Zack Leder at 770.396.2200.
For more information on PPP loans, the CARES Act and other coronavirus legislation, please visit our coronavirus resource center.