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Distributor's Link Magazine Fall 2020 / Vol 44 No 1

76 THE DISTRIBUTOR’S

76 THE DISTRIBUTOR’S LINK Roman Basi Roman Basi is the President of The Center for Financial, Legal & Tax Planning, Inc. Roman graduated from Milliken University obtaining a Bachelor’s of Science Degree with a minor in Psychology. He earned an MBA from Southern Illinois University with an emphasis in Accounting and recevied his JD degree from Southern Illinois University. Roman is a licensed CPA as well as being a licensed attorney in Illinois, Missouri and Florida and is in high demand for his expertise in financial, legal and tax matters. His areas of expertise include mergers and acquisitions, contracts, real estate law, tax and estate planning. RECENT DEVELOPMENTS AND GUIDELINES FOR PPP LOANS FROM THE SBA Over the course of the first half of October, the SBA has released three new guidelines addressing some of the most frequently asked questions regarding PPP loans. For those of you that are unaware, PPP (Paycheck Protection Program) loans were provided to small businesses as a response to the economic losses due to COVID-related shutdowns. PPP borrowers can qualify to have the loans forgiven if the proceeds are used to pay certain eligible costs. On August 8, 2020, the program stopped accepting new applications even though almost 4 billion of congressionally approved funds remained unspent. Now, most businesses are focusing on applying for forgiveness, which is all but guaranteed so long as 60% of the forgiven amount was used for payroll purposes. On October 5, 2020, the SBA announced new guidance that described the procedures requiring a change of ownership of an entity that has received PPP funds. The SBA procedural notice, which was addressed to SBA employers and PPP lenders, described when a change in ownership has occurred and the duties of a PPP borrower continue regardless of the ownership change. According to the notice, a “change of ownership” occurs when one of the following is true: 1) at least 20% of the common stock or ownership interest of a PPP borrower is sold or otherwise transferred; 2) the PPP borrower sells or otherwise transfers at least 50% of its assets to be measured by fair market value; or 3) a PPP borrower is merged with another entity. Notwithstanding any ownership change, the PPP borrower still remains responsible for performance of all obligations under the PPP loan, certifications associates with the PPP loan application, compliance with all PPP requirements, PPP documentation, and providing the required documentation to the SBA or lender upon request. The SBA must be notified within five (5) days CONTRIBUTOR ARTICLE of any transaction by the PPP lender. The lender is also required to continue submitting the monthly 1502 reports until the PPP loan is fully satisfied. On October 7, 2020, the SBA released guidance clarifying the deferral period for PPP loan payments. Prior to the passage of Paycheck Protection Program Flexibility Act of 2020, the deferral period for PPP loan payments was set at 6 months. However, the Flexibility Act extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period). Under the updated guidance, PPP lenders are required to give immediate effect to the statutory extension and must notify all borrowers of the change. On October 9, 2020, the SBA released an interim final rule (IFR) that provided almost instant relief for approximately 3.57 million businesses. If their PPP loan was for ,000 or less, businesses are exempt from any reductions in forgiveness based on either: reductions in full-time equivalent employees or reductions in employee salaries or wages. Small businesses that fit in this category may apply for forgiveness using SBA Form 3508S. The new rule speeds up the forgiveness process for PPP borrowers of ,000 or less because they will not be required to perform potentially complicated FTE or salary reduction calculations. Because most businesses would hire an outside source to do this work, they are now also more likely to save money on this portion as well. Borrowers of ,000 or less will still have to make some certifications and provide documentation to the lender for payroll and nonpayroll costs. CONTINUED ON PAGE 150

THE DISTRIBUTOR’S LINK 77 NATIONAL FASTENER DISTRIBUTORS ASSOCIATION 3020 Old Ranch Parkway #300, Seal Beach CA 90740 TEL 562-799-5509 EMAIL nfda@nfda-fasteners.org WEB www.nfda-fasteners.org NFDA’S MONTHLY VIRTUAL EDUCATION PROGRAMS by Vickie Lester The National Fastener Distributors Association will offer programs each month in 2021 that appeal to all segments of your fastener business: operations, sales and marketing, human resources, and executive management. First up will be a webinar on “Bringing Diversity, Equity, and Inclusion to Your Workplace,” on January 14, 2021. This program is cosponsored by Young Fastener Professionals (YFP). Having a diverse, equitable, and inclusive workforce has been proven to lead to innovation, profitability, higher retention rates, and higher job satisfaction. As the population and workforce continue to become more diverse, it is critical that DEI initiatives are a strategic priority. Please join us for this important webinar on how to integrate diversity, equity, and inclusion within your company. It will appeal to company owners, executives, managers, and human resources professionals. The webinar will be led by Antoinetta Mosley, the founder and principal consultant of I Follow the Leader LLC, a ASSOCIATION ARTICLE leadership consulting firm specializing in diversity, equity, and inclusion (DEI) engagement opportunities. She is a Certified Diversity Professional (CDP)®. Schedule of Events 2021 February 11 Operations Roundtable March 11 Sales/Marketing Roundtable March 18 CEO Roundtable April 8 Human Resources Roundtable May 13 Operations Webinar June 10 Sales/Marketing Roundtable July 8 Human Resources Roundtable August 12 Operations Roundtable September 9 Sales/Marketing Webinar October 14 Human Resources Roundtable October 21 CEO Roundtable November 11 Operations Roundtable December 9 Sales/Marketing Roundtable For registration information visit www.nfda-fastener.org or call Amy Nijjar at 562-799-5519. NATIONAL FASTENER DISTRIBUTORS ASSOCIATION

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