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Stimulus Check Advice That Serves Clients Best


Now more than ever, clients need advisors to provide clear direction with stimulus package status and implications. They should harmonize their internal efforts to identify opportunities for their clients and determine the best path forward.

Feb 10th 2021
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When discussing stimulus package issues, trusted advisors must be fact-based and proactive when it comes to client-facing communication. It is crucial to remain clear and transparent, rather than jump too quickly to conclusions.

Advisors have always provided critical leadership to the organizations they serve. Throughout the COVID-19 pandemic, advisors have even more demonstrated their value with unmatched expertise and guidance.

Take a Team Approach

One of the most important advisory needs in recent months has been the management of information. With ever-changing information, working as a team ensures advisors and their colleagues are up to date on best practices and newly issued guidance.

A centralized, team-based approach can be incredibly valuable for any accounting team to keep track of evolving updates. There should be one place associates can go to ask questions and receive a consistent response.

Utilize a centralized email or web share file area to aggregate issues as they arise and get questions answered in a consistent manner. Consider daily, weekly or bi-weekly firm-wide Zoom/Teams briefings to discuss changing rules and regulations as well as answer questions in a larger group format with real world facts and situations.

Talk Clearly About Employment Credits

Harmonizing efforts goes beyond minimizing internal headaches—it helps enhance client cashflow. Current regulations provide that businesses are not allowed to double dip payroll dollars used in Paycheck Protection Program loan forgiveness and other employment credits.

Whether it’s the PPP, Economic Injury Disaster Loans (EIDL), Employee Retention Credit (ERTC) or another program, use of a basic flowchart to determine which method is the right fit for your client. Some will find that the answer is clear which direction to go, but where it is not, specialists must be able to work in together for the best solution for that client. 

Where to Start

If the client has not yet applied for PPP 1.0, that’s a good place to get started. If they did apply for PPP 1.0, the next step is to determine if they qualify for PPP 2.0 then, look into the ERTC. If they don’t qualify the PPP 2.0 or ERTC, research state and local grants in your client’s specific location and industry. Consider reaching out to the local chamber of commerce which may have a better pulse on what is available for businesses in their geographic area.

Finally, consider the Shuttered Venue Operators (SVO) Grant, but be sure there is no overlap with other programs in place. If they are not eligible for any of the aforementioned, but still in need of additional funding, look toward other loan programs, such as the Main Street Lending Program.

Know the Limitations

With each different kind of stimulus opportunity comes different limitations. The PPP 1.0 loan cap is $10 million and is based upon two and a half months of average monthly payroll and is only available for small businesses with fewer than 500 employees.

The PPP 2.0 is slightly more restrictive, including a 25 percent decrease in revenue, a reduced employee threshold from 500 to 300 and a loan cap of $2 million. The passage of recent laws allows the use of ERTC in tandem with the PPP loan program adds opportunity, but the calculations are fairly unique with the inability to use same payroll for both programs.

Businesses that are performing well financially also need attention. Many companies have pivoted and adapted their business models to the new environment by using the PPP to keep employees on board throughout the adjustments in their business model. In those instances, business owners should take a birds-eye view, look at their long-term future and consider next steps. The time is now to position them for a strong future.

So What’s Next?

The IRS and SBA are expected to provide further guidance regarding the available stimulus programs. Meanwhile other forms of stimulus are anticipated to come from the new Presidential administration. Advisors must keep this evolving guidance and new programs in mind when advising client on their best options.

To stay abreast of prospective changes, tune in to sessions of Congress and committee meetings. Looking ahead further into 2021, likely changes in tax law will be the next focus as we hope to see the COVID restrictions ease, economic conditions improve and the continued need to be proactive in managing cashflow.

As guidance changes, consider weekly phone calls with clients to deliver the consistent updates they will need. As advisors, one of our fundamental roles is to offer leadership and identify critical information, providing proactive updates that help clients stay ahead of what comes next.

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