The small business loan program, intended for businesses with fewer than 500 employees, has been critical in helping companies weather the coronavirus pandemic. The program allows companies to have their loans forgiven if the funds are spent on payroll, benefits, rent and utilities.
The Paycheck Protection Program (PPP) has been the subject of recent controversy in the media, as some organizations without liquidity issues appeared to be taking advantage of the program. Senate and House Democrats recently sent requests to the inspectors general in the Small Business Administration and the Treasury Department to investigate the implementation of the program and whether funds were given to businesses who really needed them.
Treasury and SBA guidance has announced that the government will be reviewing loans over $2 million prior to forgiveness.
Guidance related to the PPP required borrowers to certify in good faith that their loan request was necessary. Therefore, it is reasonable to assume that borrowers will have the burden of proof to demonstrate that their business was not only negatively impacted by COVID-19, but that the funds received were necessary to maintain operations and keep employees on the payroll.
Boulay is here to help.
We want our clients to have their small business loans forgiven. If you are concerned about the PPP Audit, please contact our Risk Advisory Team for assistance. We can help you prepare for the audit and ensure that you have the proper supporting documentation to satisfy the regulators.