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CARES Act - Paycheck Protection Program (PPP) Loan: How to Apply? Thumbnail

CARES Act - Paycheck Protection Program (PPP) Loan: How to Apply?

Banks and business owners are trying to get money from the PPP Loan as soon as they can. For obvious cashflow reasons, but also because no one really knows how long this will take to process with so many businesses applying and banks being overwhelmed. We reached out to a few banks and found that they are still waiting for the Small Business Administration (SBA) to give them guidance. Many are hoping that by the end of this week (March 3, 2020) or early next week they can start processing loans.

SBA- Sample Loan Application

What Can You Do to Be Ready to Apply for the PPP Loan?

  1. Reach out to your banker so you are on their list. Not sure which banks do the SBA 7(a) PPP forgiveness loan? Check out this list of the top 100 most active lenders.

  2. Get your documents prepared now to be ready to apply as soon as they open up.

Documents You May Need to Apply for a PPP Loan

While every bank is going to be different, we have put together the following comprehensive list of documents you can start gathering now to ensure you are ready.

  1. COVID-19 Certification/Impact: You will have to certify that your business has been impacted. Some banks may have you check a box to certify while others may require you to provide a written statement. So just in case, get the written statement ready.  Write a few sentences on how the COVID-19 has impacted your business.

  2. 2019 Payroll: The loan is going to be based on 2.5 times your 2019 monthly payroll amounts. The banks may want to verify this to know how much to potentially give you. Pull down the following reports from your payroll provider.

    • W-3 and W-2’s: This gives your entire payroll numbers for 2019.

    • Payroll Tax Returns: All of these should be a simple download from your payroll company.

      • 941’s: You will have one for each quarter in 2019.

      • State Form: You will have one for each quarter (Example: Florida = RT-6 Quarterly Report)

      • Annual 940 Form

  3. 2019 1099’s Listing (Independent Contractors):  Originally Independent contractors were to be apart of your PPP loan.   It seems since that further detail says they are no longer.   This seems to be the case since IC's can potentially apply themselves on April 10th.   I would recommend having the 1099 totals just in case, when the final SBA guidance to the banks comes out you will be prepared.  

  4. If they did count, the only 1099’s that will count are those that are a type of “employee”.

    • Example: You may have given your cleaning service a 1099 since they are not incorporated, but they won’t count toward your independent contractor list. If you employed an associate dentist as a 1099, they may be counted.

  5. Business Tax Returns: Have 3 years ready to be safe.

  6. Financials: Have 3 years ready to be safe

    • 3 Years Financials

      • Profit & Loss Statement

      • Balance Sheet

    • Year to Date Financials

  7. Other Documents- Statements:

    • Rent Lease Agreement or Mortgage Interest: Even if you own the building. You likely have the building in an LLC with a rental agreement between the practice and your LLC. Pull out that rental agreement as it needs to be in place prior to Feb 15th, 2020.

    •  Utilities (Latest Statement)

      • Electric & Water

      • Telephone

      • Internet

    • Other Business Loans

      • Pull down your latest statements

      • Pull down the loan agreement

      Documents you may need for forgiveness

  8. 2020 Payroll: Print a payroll summary for Jan 1, 2020 – Feb 15, 2020

  9. 2020 Payroll Benefits:

    • Group Healthcare Premiums

    • Payment of Retirement Benefits by Company 

  10. 2020 EIDL Disaster Loans Taken Out (If Any)

  11. Potential Personal Items:

    • 3 Years of Personal Tax Returns

    • Personal Financial Statement: This is going to be a listing of your personal net worth and cashflow. List out all of your assets (Cash, investments, Real Estate, etc) and all of your debts or liabilities (Student Loans, Credit Cards, Mortgages, Etc) to get your net worth. Also, list out your income sources.

This is a thorough list and if you have all of this ready then when the banks start allowing businesses to apply, you can quickly and easily provide these already gathered documents. This should help get your loan processed faster.

Note: Originally 1099 Independent contractors were to be apart of your PPP loan and included in your average monthly payroll.   However new guidance came out indicating they are not included.  This seems to be the case since IC's can potentially apply themselves on April 10th. 

If your CPA isn’t available to help answer your questions and you are looking for a more proactive CPA, call or e-mail us today.