With PPP Round 2 open we thought we would take the opportunity to go over some FAQs that relate specifically to Sports Businesses. These FAQs are meant as a starting point for you to speak with your accountant or lawyer and they should not be taken as legal advice. Its also worth noting that guidance on many of these questions is unclear and subject to change based on updates from the SBA and the Treasury.
Does Gym or Field Space on an Hourly Basis Count as a Reimbursable Expense?
For sports, fitness, and activity organizations that don't own their own facilities this is a critical question. If you are paying regular rent on a monthly basis it seems that the PPP loan should be able to be reimbursed if it goes toward this rent. If you were renting space for one off events like a tournament then it is not as clear. While this is a critical question , the guidance is unfortunately not as clear as would be ideal. Ultimately it will be up to your bank to decide on what parts of your PPP loan can be forgiven. From our conversations with bankers, it seems if you have a monthly bill for rent from a facility this should be sufficient to have it be reimbursed. We recommend you monitor updates from the SBA. Senator Rubio and Senator Manchin has been vocal about seeking clearer guidance and flexibility for small businesses. We recommend following them and monitoring the news for additional updates.
Do 1099 Employees Count Toward Your Maximum PPP Loan Amount?
No. Your Maximum PPP loan amount will be 2.5 times the sum of all approved wages for W2 employees and the self employment income of owners of the business. You will not be reimbursed for payments to 1099 employees.
When Can I Spend the Money We Receive if We Want it Reimbursed?
The current guidance is that you must spend funds with 8 weeks of when they are deposited in your bank account. Several Senators have called on the SBA to make this more flexible and to provide additional guidance. As of now you must spend the money within 8 weeks of when funds are received. The NY Times has a great article here on the difficulties this creates for all small businesses. As frustrating as it is we recommend you plan on spending the money within 8 weeks of receiving it while monitoring the news for updates.
What Other Programs Can I Apply to Beyond PPP?
Checkout our post on additional programs available for sports, fitness, and activity businesses here. You can also join the waitlist for Playbooks $1 Million discount and cashback and grant program here.