Follow Up Steps for Payroll Protection Program
Once a business has applied for and been granted funds for the Payroll Protection Program (PPP), there are several considerations to keep in mind as follows:
- From the date that the loan is funded, you have eight weeks to spend the money on authorized expenses.
- Proceeds of the PPP must be used only for authorized expenses. Spend the PPP money on qualifying expenses before you use your own money. Consider a separate bank account for receipts and systematic transfers of funds to cover the outlay of weekly-authorized costs.
- Know what documentation your bank will require after eight weeks to substantiate the loan forgiveness. Consider adding detail to your accounting system to track these costs separately, such as new accounts or class tracking in your accounting program/system. As soon as the 8-week clock starts, all eligible expenses should be tagged to the new accounts or class.
After the eight weeks, you will need to submit a request to the bank who is servicing the loan. The forgiveness request must be in writing. Your request should document the number of full-time equivalent employees, pay rates, your payments on an eligible mortgage or lease, and utility payments. The request should include all documentation supporting the spending of the funds. The lender will have 60 days to decide on forgiveness.
We highly recommend contacting the bank early on to determine the appropriate loan forgiveness documents. We expect the required documentation to be a bit of a moving target in the near-term, so we encourage you to over-document and track everything.
You may also refer to the US Treasury SBA Interim Final Rules here.
During these unprecedented times, Bormel, Grice and Huyett is dedicated to assisting you. Please call our office at 301-953-3259 if you have any questions regarding the Payroll Protection Program.Back To List