Thoughts To Keep In Mind For PPP Loan Funds
I have been talking with a number of business owners over the last week about the PPP loan, and it prompted me to share some of my thoughts with you regarding these funds.
First, be sure to document everything you can, particularly how you are being impacted by COVID-19. Whether you have made application for any CARES Act programs or not, it is a good practice in general to be building a narrative, by means of financials and records, as to how you are being impacted.
If you did move forward with the PPP loan application (FYI, there may be a round 2 of funds that open up in case you didn’t get in this first wave), you want to keep in mind that you are going to need all of the proper documentation (the forms the SBA outlined, etc.) down the line in order to try and get the loan forgiven. So again, make sure you keep track of everything.
Second, I want to underscore the need to definitely make sure you use the funds only towards the uses outlined by the SBA for any and all of the programs for which you applied—that is going to be a BIG factor, along with the proper documentation, in trying to obtain the forgiveness later. This will also keep you out of hot water!
Also, in thinking about the use of funds, be sure to use the funds within the specified time given to do so—8 weeks from your receipt of the money. The forgiveness applies for up to 8 weeks of payroll if you are able to obtain the forgiveness, and at least 75% of the funds received must be spent towards payroll. From what I have heard, anything not spent within the 8 weeks becomes a note. I have even heard recommendations regarding creating a separate bank account specifically for the PPP funds you receive so that you have clear records of where the PPP funds were spent.
I know for many the information has been somewhat vague, and the process has been somewhat frustrating, so I want to continue to pass along information that I think may help you. Additionally, here is link directly to the SBA website so that you can review the specific PPP loan overview for yourself: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
If there is something that you have questions about or you just want to discuss something in general, please feel free to reach out to me. If I don’t know the answer, I will do my best to point you in the right direction of someone who does.
*** Please note that this information is not intended to be fully-inclusive or advisory and is only being posted as a courtesy. You should certainly complete your own due diligence and investigation as to what the stipulations and requirements are for these various resources. It is also recommended that you seek the advice of a professional regarding your specific situation and circumstance.