Frequently Asked Questions by Pharmacists About PPP Loans
While fielding your questions and requests for assistance, we created this video as one more resource for independent and community pharmacists — answering your most frequently asked questions about the PPP program and more.
Scotty Sykes, CPA, CFP ® questions Ollin Sykes, CPA.CITP, CMA, about aspects of the PPP loan program, how the loan may be forgiven and why it’s so important to document the future use of those loan funds. He also directs pharmacists to other key industry resources that can help.
Our pharmacy advisory services team is developing general operating procedures for pharmacies that do receive these PPP funds. For additional information, see our blog post about the PPP program.
If you prefer to read this content, the video transcript is below.
[Scotty] Yeah, so we hear about, “How do you get started with the PPP?”
[Ollin] And what most pharmacies are doing is contacting their primary bank contact. Now, that may be the pharmacy at this bank that made their initial loan. It may be their local depository. But it has to be only one because you can only make one PPP loan. But some of the local banks we have heard across the country are not as advanced as some of the other banks, and they’re not really. They don’t have the technology in place that some of the larger or regional banks do. So you just need to immediately, if you haven’t already, reach out to your local bank and see what program, or see where they are in that program and proceed forward quickly.
[Scotty] Can you apply for more than one PPP loan?
[Ollin] No, Scotty, you can’t apply for more than one loan at a time on the PPP side, is our understanding.
[Scotty] And, what about my real estate entity?
[Ollin] If your real estate entity has payroll, then you would be eligible. But most real estate entities that own pharmacies just have the pharmacy entity contained in it, receive rents, have a mortgage payment perhaps, property taxes, et cetera. So they wouldn’t be eligible.
[Scotty] And, what are the eligible uses of the PPP funds?
[Ollin] The eligible uses for the PPP funds are primarily payroll. It will be rent, it will be retirement benefits paid by the employer, it will be healthcare benefits paid, as well, by the employer. It would be state unemployment tax. Included in the rent is utilities, Internet, telephone, and a mystery figure called transportation, and we’re not really sure what they intend to include there.
[Scotty] And, so I’ve already laid off workers, cut hours. Am I still eligible and, if so, will that impact my forgiveness?
[Ollin] You are definitely eligible, and you probably want to add those workers back because the whole intent here is that you keep your work force in place, so if you’ve laid off somebody, I’d bring them back home as that full-time employee. You want to make sure that whatever employees that you had on February 15, full time equivalents, and that’s 30 hours or more is considered a full-time equivalent by SBA.gov rules, that you have as many of them in place and processed as you can. If you decrease your employees from that measuring point, you may have some of your loan not forgiven.
[Scotty] And so, I’ve been funded. What are the best practices here, now that I’ve been funded, to ensure that I’m accounting for and getting everything in line for forgiveness?
[Ollin] Brilliant question. What we’re suggesting is once you get funded, you open up a separate account in your pharmacy and you transfer those monies there, and then you can utilize that account to extract funds from that account to your other accounts, whether it be a payroll account or a regular account, and be able to keep up with that documentation and tracking of those funds that you’re taking out of the account over the next eight-week period of time. But you track that very carefully because at the end, the bank is going to get with you and you’re going to have to document exactly how you use those funds. As you commingle those funds with other funds, it may be much more difficult to do that.
[Scotty] And what are some resources I can utilize to navigate through all of this?
[Ollin] Well, obviously, Sykes & Company, sykes-cpa.com, we can assist you in any way possible here. SBA.gov has a wonderful website. The NCPA has some tremendous materials out there on the coronavirus situation. And many of the pharmacy niche banks like Live Oak Bank and First Financial [Bank]. Then, some of the larger pharmacy niche banks in the country have resources on their website as well. So, that would be how I’d answer that question.