PPP Loan Forgiveness: October 2020 Update


20 Oct
20Oct

Does hearing about the PPP Loan Forgiveness Application give you heartburn?  Don’t let it.  We are here to provide you with a little insight into the process.  As always, we encourage you to speak with your professional bookkeeper, accountant, or trusted financial advisors for support.  The Small Business Administration (SBA) states there are approximately 3.57 million outstanding PPP loans of $50,000 or less.  Are you one of them?   

Let us dive right in.  The latest news, as of the second week in October, is that the Small Business Administration (SBA) just released a third PPP Loan Forgiveness application. This application is only for those businesses that received $50,000 or less in total loan funds.  The good news, this application is a two-page document that does not ask you to show your forgiveness amount calculations, as previous applications have required.  Page two will ask for an overview of demographic information on your business – essential to fill this out.  

Page one of the application will review the following with you: 

  • The dollar amount that is requested to be forgiven does not exceed the full PPP loan amount.  

  • The loan funds were used for the approved business expenses (payroll, mortgage interest payments, business lease payments, and utility expenses) set forth when the loan was granted.   Payroll costs must equal to at least 60% of the total loan granted.  

  • Preference on a 24-week Covered Period vs. 8-week Covered Period.   

  • Understanding that the funds were again used for authorized purposes.  

  • Proper receipts of all expenses used with the loan funds. 

  • Understanding that all information that is received with the loan forgiveness application will be submitted to the IRS.   

All of the items listed above are included in the previous loan forgiveness applications that have been released, however one important to note for small businesses that again, received less than $50,000 and are completing the newest application, 3508S, this application does not ask any questions on the reduction of your workforce.  If you had to let go of employees during the COVID-period, you do not have to list them on this specific application.    

As discussed in our recent blog, PPP Loan – How Do I capture in QuickBooks?, documentation is necessary.  We encourage you to speak with your professional bookkeeper, your accountant, or trusted financial advisor.  You want to ensure your PPP Loan Forgiveness Application is accurate when you submit it to save you heartburn for months and even years to come.   

 

Are you interested in learning more about ShoreSource Business Solutions, LLC?   
Feel free to reach us at 843.729.2961 or info@shoresourcebiz.com. 

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