I Got the PPP Money – What Do I Do?
What borrowers can do to avoid personal liability and maximize forgiveness of the loans
It has been almost two weeks since the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) was signed into law. The CARES Act created, among other things, the Paycheck Protection Program (PPP) which provides for low interest loans for small businesses to cover certain payroll and operating costs. PPP loans may be forgiven, in whole or in part, if the funds are used for eligible costs during the covered period and jobs are retained and salaries are restored by June 30, 2020.
SBA approved lenders began accepting PPP loan applications beginning April 3, 2020. We are pleased to report that eligible borrowers (and some of our clients) are receiving lending decisions and loan funds. Now that borrowers are receiving loan funds, there are several things borrowers can do to avoid personal liability and maximize forgiveness of the loans.
As soon as the funds are received, borrowers should deposit the loan funds in a separate account to simplify record-keeping and reporting. This will enable a borrower to easily demonstrate proper use of the funds and compliance with the forgiveness provisions of the PPP.
We can then assist you:
1. Review your application, document submissions and certifications since if there is an
error (because of the constantly changing guidelines) you would like to catch it early and
correct it with your bank
2. Confirm your understanding of eligible uses of the loan funds
3. Take steps to maximize forgiveness of the loan
4. Determine if and when you should hire back certain employees because you do not want to miss the number of employees rehired or the deadline for doing it
5. Determine if and when you should restore wages for certain employees because you do not want to miss the amount or the deadline for doing it
6. Estimate your loan forgiveness amount based on anticipated eligible costs.
We look forward to helping you navigate through the next steps in the loan process. More information on the CARES Act and the PPP can be found in our firm’s COVID-19 Resource Center by clicking here. You may also contact us at 215-887-0200.