Five (5) recommendations for the Paycheck Protection Program loan to be forgiven
The SBA Salary Protection Program (PPP) has been implemented and many businesses have received the requested funds. However, the process does not end when the funds are received; documenting all expenses to apply for debt forgiveness is almost as important as having submitted the application itself.
En un artículo anterior comentamos los requisitos para lograr la condonación del PPP, en esta entrega profundizamos sobre cómo documentar el uso de los fondos en forma completa, adecuada y organizada.
1. Utilice una cuenta bancaria única para el manejo del dinero del PPP.
1. Use a single bank account to manage the PPP money. From the moment you receive the PPP loan, it is recommended not to mix it with other funds. By transferring funds to a bank account dedicated only to this loan, it will be much easier to keep track so you can demonstrate how the funds were used. In case you have expenses to cover – which can only come out of other specific bank accounts – you can transfer the exact amount for that expense.
2. Decide in advance what you will use the funds for.
Create a list of expenses you plan to cover using the funds on this loan and verify that those expenses meet the requirements for the loan to be forgiven.
3. Work with your accountant or payroll provider to get a clear idea of the number of employees and the level of wages you must keep.
Knowing the number of employees and the level of wages you must keep is important to increase the possibility of debt forgiveness. The worst thing that can happen to your business is that once you have reached the end of the eight (8) week period, you do not qualify for the (full or partial) forgiveness of the debt because you did not take into account the proper calculations of the staff or salaries.
4. Separate the expenses you will use for forgiveness application in a separate ledger account apart from regular ones
The expenses that will be used to support your loan forgiveness request are not eligible to be deducted from your taxes. For this reason, it is important to keep a separate record in a separate account and not mix it with regular expenses.
5. Ask your bank for information about the requirements and documentation you'll need
The bank (or lender) and the SBA will decide jointly whether the debt will be forgiven, based on the SBA guidelines. The documentation that each bank will request may vary, so it is important to be clear about what documentation will be required by your financial institution.
Debt forgiveness processes will not be easy or fast, make sure you work in an organized and proactive manner, to increase the chances of success of getting PPP forgiveness.
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