Guest Blog Post by Robert Porter of Hudson Cisne & Co. LLP
Small businesses with fewer than 500 people and sole proprietors may be eligible for a Payroll Protection Loan from the federal government as a response to the COVID-19 impact on businesses. I have heard from clients that some of these loans have already been approved, which is excellent news! For businesses with payroll, the application period opened Friday, April 3, 2020 and runs through June 2020.
For sole proprietors - i.e. the businesses with no payroll - the application period opens Friday, April 10, and also runs through June 2020.
Two things I want to point out today. If you do indeed get funded with a PPP loan, I strongly recommend you take the following actions:
- Set up a separate bank account to receive the funds from this loan - pay all of the expenses allowed by the loan (payroll, rent, etc.) directly from this bank account.
- A separate bank account will allow for easier tracking of your use of the loan proceeds
- Before accepting the funds, have a one to one discussion with your lender to understand exactly what documentation they will need later in order to approve the forgiveness of the loan. If you can, get a list in writing.
- Yes, the process for these loans is getting a bit clearer and more straightforward. But I continue to see some variability across banks regarding the required documents - at least during this application period. Therefore, don’t just go by what you can read on-line. Get the information directly from your lender. These lenders may not exactly know yet all of the documentation they will need at the end. But I suggest you at least get the discussion started and stay in close contact with them during the next few months.