The PPP Loan is Over — What Now?

The Paycheck Protection Program (PPP) provided a financial safety net for small businesses across the country impacted by COVID-19. The program was able to pull many small businesses out of debt, or at least help keep them afloat.

There are still a lot of questions associated with this program for businesses and CPAs because of the haste with which the package needed to be put together to keep small businesses from going under. The Small Business Association (SBA) has been working tirelessly to answer these questions for thousands of businesses.

With the program having closed Aug. 8th, we wanted to answer some of your questions about PPP Loan Forgiveness and allay some of your fears.

PPP Loan Forgiveness

What we know right now is that Congress is working on another extension and more help for small businesses. We are currently recommending that business owners wait to learn more about these extensions, and see what plays out in Congress before applying for forgiveness. Things are changing on a day-to-day basis and the parameters could be vastly different in just a couple of months.

The good news is that there really is no need to rush into loan forgiveness paperwork. Businesses have 10 months from the end of the loan’s covered period to apply – while your business can apply earlier than that, it may be in your best interest to wait until Congress is able to finalize more of their decisions.

Things to Keep in Mind When Applying for Loan Forgiveness

There are a few exceptions to the rules that were originally laid out for the PPP plan. While it was designed to help businesses keep full time equivalent (FTE) employees on payroll, some situations are forgivable. Three of the most common situations include:

• Employees who were offered their FTE position back but refused it
• Employees who were fired with cause or resigned
• Employees who requested fewer hours

The most important thing you can do right now is to keep documentation of everything that has happened and any changes you make within your business that relate to the PPP loans. The paperwork for PPP loan forgiveness is extensive and detailed. The more that you’re able to show concerning what you did with the money, the better!

Most importantly, if you have any questions about the program, do not be afraid to ask. This is new for everyone and the more information we can gather, the better we can understand about how it works and how it will continue to affect small businesses.

The main takeaway from this is to be patient, watch for updates, and keep your paperwork in order for the time being!

For all the small businesses out there struggling during the pandemic — our hearts are with you! If you need help organizing your paperwork for PPP Loan Forgiveness or have any questions, Taurus CPA Solutions is more than happy to help.

 

Our services are targeted toward entrepreneurs and small business owners, and we offer a wide range of financial services to keep your business running. Contact us online or give us a call at (410) 465-2830.