Once you receive the good news that your loan was approved, you may be asking “What are the next steps?” Below are suggestions and considerations to utilize your loan effectively.
1. Track the funds separately.
Deposit the funds into a separate checking account dedicated to the PPP Loan proceeds.
- This will aid in tracking the funds used for the specified purposes.
If a copy of the bank activity is requested, you now have a separate account versus having to share all operating bank activity.
2. Write it down.
Maintain a “journal” of the effects COVID-19 has had on your business.
- Loan certification requires an assertion that COVID-19 impacted the business.
- The diary/journal could be electronic or written.
- The entries could be weekly or as needed.
This log can provide information and specific examples of how your business was affected from employees to customers, vendors and more.
3. Plan ahead.
Planning ahead will facilitate the maximum opportunity for Loan Forgiveness for the period of eight weeks after the date of your loan.
Are your operations currently shut down?
- If you have staff furloughs, when should you have the employees return?
- If you are currently paying staff while operations are shut down – what are your options?
- Modeling various scenarios may aid in your decision-making process.
Maintain adequate records for support of Payroll Costs.
- Prepare the data for submission related to each payroll, including:
- Wages – please note, commodity wages may receive different treatment.
- Health Care Costs using a reasonable allocation method.
- Retirement Plan Employer Contributions
- Ensure you are not “double-dipping” which would sacrifice loan forgiveness opportunities.
- If paying employees under the Families First Coronavirus Response Act for Emergency Sick Pay or Emergency FMLA, maintain adequate records as these amounts will be adjustments to your Payroll Costs.
- You cannot participate in the following CARES act benefits:
- Employee Retention Credit
- Delay of Employer Tax Payments
- Keep a separate file with invoices paid for the following:
- Mortgage Interest
As we continue to navigate the challenges ahead, please know that we will always keep you informed as quickly as possible. We have created a web page that will house helpful resources and updates to COVID-19 here.
If you have any questions or need additional information, please contact Andrew McDonald at amcdonald@LBMC.com.