Overview of Paycheck Protection Program
In an effort to support businesses during the coronavirus pandemic, The Paycheck Protection Program (PPP) gave out $525 million in loans. This was distributed to about 5.2 million companies between April 3 and August 8. That’s a great deal of money, and you’d think that it would be enough to help. The problem was that many people took advantage of the system.
The issue is being looked into by The Small Business Administration’s inspector general, part of the agency that administered the loans, who says that there are “strong indicators of widespread potential abuse and fraud in the PPP.”
Fraud PPP Activity?
The Treasury Department received 2,495 suspicious-activity reports in September, more than the total for any year dating back to 2014. Among the activity reported were instances in which multiple government payments from coronavirus-relief programs were made to a single account, suggesting abuse of the program.
There are several hundred ongoing investigations related to PPP according to the Federal Bureau of Investigation. Tens of thousands of companies received loans even though they appear to have been ineligible. Many businesses received more than they should have according to their own headcounts and compensation rates.
I personally am not surprised by this outcome, given how ripe this opportunity was for the picking. The entire process was cobbled together very quickly, and the requirements were constantly changing.
2020 Year in Review
2020 has been somewhat of a hectic year in terms of financials and accounting. Many of my clients have turned to me for help navigating it all. Accountants should be prepared for more of the same in 2021, according to experts from the American Institute of CPAs. There is even talk of a second wave of PPP loans to help mitigate the economic crisis.
The idea is that “PPP 2” will be different from the first round and aimed at helping more small businesses. Its progress through Congress is slow though, since there is much dispute over the rest of the new stimulus bill.
PPP Loan Forgiveness Requirements
Forgiveness around PPP loans has changed more than once. If you would like to figure out just how much your company would be eligible for, there are many PPP loan forgiveness calculators like this one. There are also different forms you can use to apply for forgiveness depending upon your individual situation. Further, be sure you’re looking at deadlines.. You don’t want to apply too laste and miss your opportunity for forgiveness.
What This Means to You
Whether you’re looking to maximize your PPP loan forgiveness or looking for advice when it comes to applying for PPP 2 loans, it’s important you get the expert guidance you need.
At Redmond Accounting we offer a variety of small business accounting services; schedule a complimentary consult so we can learn more about your company’s needs.
We’d love to talk with you. we’d love to help you empower your business through accounting expertise and insight.
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