Many business owners cheered as the news came out about the Paycheck Protection Program (PPP) loans. The money was not distributed perfectly, but for a “rush job” it was still done pretty well. Then, the money went out and we have witnessed the result, in that many businesses that had no customers for weeks and months are reopened and here to serve. If not for the PPP, many would not be! However, nobody can afford to let their guard down just yet, as they are loans that must be paid back in full to the SBA! That’s right. As of today, nothing is forgiven and we all owe PPP money back! That can change if you take action, but many business owners that are now back to work and already stressed enough managing business with all the COVID rules could easily forget or miss the most important last step, which is more paperwork to apply to the lender to have the loan forgiven. If you don’t successfully do that paperwork, then you could owe that money back, so PAY ATTENTION!
Here’s what we know so far:
In order to get your loan forgiven, you’ll need to complete a PPP Loan Forgiveness Application Form 24 weeks after the loan was taken out and submit it to your lender (or sooner, if you have used all of the loan proceeds for which you are requesting forgiveness). If you had a PPP loan prior to the Paycheck Protection Program Flexibility Act being signed, you can choose to use the original 8-week period instead of the 24-week period. After you submit your application for forgiveness, your lender is required by law to provide you with a response within 60 days.
There are a lot of rules that were developed after the money was distributed, and in some cases, a great deal of effort will need to be made by business owners to gather proof that funds were spent correctly. Our recommendation is, whether you take the 8-week or 24-week option, that you take a look at the new rules and learn how you will attempt to get the loan forgiven as soon as possible.
You’re at the 50 yard line, NOT the end zone. Don’t punt. RUN!
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