On Friday, May 15, 2020, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) loan forgiveness application, causing most small business owners to scratch their heads when reviewing the lengthy and complicated application. Here at Mazur and Associates, we want to support small businesses like your own by explaining the PPP loan and the Loan Forgiveness Application.
First, a brief overview of the PPP loan itself.
The PPP loan program was created to help small business owners keep their employees on the payroll during the COVID-19 crisis. The SBA will forgive PPP loans if all employees are kept on payroll for eight weeks and the loan funds are used for payroll costs, rent, mortgage interest, and/or utilities. According to the SBA, the loan will be fully forgiven if the funds have been used for the previously mentioned categories; however, 75% of the forgiven amount must have been used for payroll costs. Loan repayment will be automatically deferred for 6 months, requires no collateral or personal guarantees, has no small business fees attached and has a 2-year maturity period with an interest rate of 1%. It is also important to understand that loan forgiveness is based upon the employer maintaining or quickly rehiring employees as well as keeping their pre-COVID19 salary or wage levels. Therefore, loan forgiveness will be reduced if full-time employee headcount decreases or if salaries and wages decrease. Any small business owner can apply for a PPP loan at any SBA lender, federally insured institution, or local lender that is participating in the program. To see what qualifies as a small business for PPP loans, click here. To apply for a PPP loan, click here. We highly recommend that you consult a CPA or a financial advisor before you attempt to apply for a PPP loan to ensure that your application is completed accurately with the maximum allowable loan amount quantified. Also, once the eight-week period has elapsed, it is critical to hire a professional to prepare the eleven (11) page Loan Forgiveness application. The SBA’s Loan Forgiveness calculation form is quite complex and specific documentation must be attached in order to have your PPP loan completely forgiven. Mazur & Associates, CPAs and Business Advisors, PC should be your choice for this endeavor, as each of our CPAs has over thirty (30) years of experience in addressing the needs of small businesses like yours. Before the eight-week spending window has elapsed, kindly telephone our office at (732) 936-1230 to schedule a conference during our regular business hours. We are available Monday through Saturday to assist you.
Second, the following is a brief overview of PPP Loan Forgiveness process.
On the surface, the application for PPP Loan Forgiveness appears to be relatively simple. Step one is to complete the application (also available electronically) and step two is to submit the application to your lender who will then assess your payroll and other expense documentation for forgiveness. However, although the SBA has provided detailed instructions with the application, it is still exceedingly difficult for a layperson to complete correctly and dot all of the “I’s” and cross all of the “T’s”. Because the application was just released, there is much room for borrower’s interpretation of the instructions. Since tens or hundreds of thousands of dollars are at stake, a professional’s expertise in preparing and scrutinizing all attachments is highly recommended. The CPAs at Mazur & Associates are members of the American Institute of CPAs (AICPA), Tax Section and have access to specialized tools to ensure the accuracy of each client’s PPP Loan Forgiveness application. In addition, since late March our CPAs have taken hours of continuing professional education webinars on all aspects of the CARES Act, FFCRA and the Payroll Protection Program.
The SBA has stated that more guidance will be forthcoming over the summer months before the Loan Forgiveness portion of the PPP expires on October 31, 2020. Again, we cannot stress enough that you should not attempt to complete and submit this Application without first consulting an experienced CPA!
Here at Mazur and Associates we are qualified to render the highest level of expertise to assist our fellow small businesses. Several of our clients bypassed our counsel and applied for their PPP loan before consulting with us. Unfortunately, a few of these small businesses received a smaller PPP loan than what they were entitled to! We are here to serve you and work to maximize the Loan Forgiveness of your business’ PPP loan. Call us today at 732 936-1230 or email email@example.com to schedule a teleconference or virtual appointment. Stay safe, all!