What are the conditions that could reduce the amount of loan forgiveness for the Beehive Homes PPP loan?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
Program Loan Payable
On April 24, 2020, the Company received loan proceeds in the amount of approximately $171,300 under the Paycheck Protection Program ("PPP"). The PPP was established under the Coronavirus Aid, Relief and Economic Security Act, as amended ("CARES Act") and is administered by the U.S. Small Business Administration ("SBA"). Under the terms of the CARES Act, PPP loan recipients can apply for loan forgiveness. The potential loan forgiveness for all or a portion of PPP loans is determined, subject to limitations, based on the use of loan proceeds over the 24-weeks after the loan proceeds are disbursed for payment of payroll costs and any payments of mortgage interest, rent, and utilities. The amount of loan forgiveness will be reduced if PPP loan recipients terminate employees or reduce salaries during the covered period. The unforgiven portion of the PPP Loan, if any, is payable over two years at an interest rate of 1%, with a deferral of payments for the first ten months.
Note E - Paycheck Protection Program Loan Payable (continued)
On February 17, 2021 the Company received a second Paycheck Protection Program loan in the amount of $153,647, subject to the same terms of forgiveness as the loan mentioned above.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the company received two Paycheck Protection Program (PPP) loans. The first was received on April 24, 2020, for approximately $171,300, and the second on February 17, 2021, for $153,647. These loans were established under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and administered by the U.S. Small Business Administration (SBA).
The FDD states that Beehive Homes could have had the loan forgiveness reduced if they terminated employees or reduced salaries during the 24-week period after the loan proceeds were disbursed. The potential loan forgiveness was determined based on how the loan proceeds were used during this 24-week period, specifically for payroll costs, mortgage interest, rent, and utilities.
It is important to note that on January 5, 2022, Beehive Homes was notified by their bank that the SBA had granted forgiveness on the PPP loan based on their application. The company recognized this forgiveness as revenue within 2022, meaning that the conditions that could have reduced the loan forgiveness did not ultimately impact Beehive Homes.