Should I Run to My Bank Today to Apply for a PPP Loan?

The Payroll Protection Program enacted by the CARES Act opens today, and there is a great rush to get applications in. Just last night, the Federal Government issued an interim final order to provide guidance to implement the program. That guidance clarified some issues, and muddied others. Should you really apply today?

Talk to Your Bank

Right now, there are a lot of unknowns about the application. The documentation requirements are unclear, and the new regulations seems to contradict earlier guidance. The SBA Form 2483 mentioned in the regulations that was formerly circulated online is now marked as a “sample” form on the SBA Website (likely because Banks are going to be allowed to accept the same information via an online form, with electronic signatures, to allow for faster and more efficient processing). Reach out to your current bank TODAY — get on their list for processing these loans. However, not all banks are authorized SBA Lenders, and some are able to be more direct than others. You may be better off with a smaller community bank that is more nimble than a large national bank for this process. We are working to find partners in the community who can help. If your bank can’t take the application today, don’t panic. Just be ready to jump on this on Monday (or even over the weekend if you get an email from your bank saying applications are open).

Gather your Documentation

Now is the time to make sure your businesses books are in order so that you are ready to go with your application as soon as you find someone to accept it. We don’t know if you will need all of this, but we recommend you gather:

  • Most recent Business Tax Return
  • 2019 IRS Quarterly 940, 941, or 944 payroll tax reports (likely downloadable from your payroll system, or get from your accountant)
  • 2020 First Quarter 940, 941, or 944 payroll tax reports
  • Payroll Summary Reports for 2019 (including gross wages, officer’s W-2 wages, PTO, Vacation, Sick, and amounts paid for state/local taxes
  • Payroll Summary Reports for last 12 months (including gross wages, officer’s W-2 wages, PTO, Vacation, Sick, and amounts paid for state/local taxes
  • Documentation of payments made for provision of group health care benefits, including insurance premiums
  • What if I am Self-Employed?

    The program opens for the self-employed on April 10. For the self-employed, gather all information on your wage, commissions, income, and net earnings. Make sure you have a profit and loss statement that you can show to the bank for 2019 and for the last 12 months (if you use Quickbooks or a similar accounting system, these reports are easily generated if your data is up to date).

    You can only get one PPP loan, so it is important to do the application right. Moreover, getting the application wrong can lead to forfeiture of the loan forgiveness, or even criminal charges.

    The landscape is shifting daily. Please call our office if we can assist you through this trying time. 813-778-5161.