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[Rick Braa] PPP Forgiveness

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In part 2 of his webinar on the Paycheck Protection Program, acclaimed restaurant consultant Rick Braa detailed how loan forgiveness works and lays out how you will want to spend your PPP loan to ensure maximum loan forgiveness and efficiency.  

Payroll includes a lot of different things, from wages to employer-paid benefits to severance pay to tips. Consider all of these under your payroll banner as you distribute your PPP loan money.  

To qualify for forgiveness, your payroll must account for 60% of the loan. Go below that and you’ll have to pay the difference, Braa noted.  

Once you’ve settled payroll, the remaining 40% of your loan should go towards, Braa recommends, paying your rent, then your utilities and then your mortgage interest. 

“The big kicker here for the restaurant industry is tips, because tips count towards cash compensation for the PPP,” Braa said. “That is a very valuable thing because that essentially more than offsets the employer taxes. You get credit for those tips for cash compensation.”