The $3.49 Billion dollar Paycheck Protection Program (PPP) is already running out of money.  The party is over!  Well, not so fast.  The Senate Republicans have passed a plan to just change the number in the CARES Act to $600 Billion instead of the $3.49 Billion.  The plan is bogged down in the House, where they want to tag on all sorts of unrelated legislation.  Politics aside, there are still things that will help you and need to be addressed.

I have developed a how-to course, COVID-19 Economic Relief Tutorial (CERT) that not only walks you through the application process, but now the forgiveness process.  Plus, CERT covers the EIDL loans, and the numerous tax credits available to small businesses.  Plus, it goes into the compliance issues. 

For the lucky small businesses that have been approved for the PPP loans, there is now a major challenge that nobody is really talking about.  The problem is “How to spend the money.”  You need to immediately formulate a plan, because the 8 weeks you’ve got to spend the money is going to go fast.  If the money isn’t spent properly, the loan will not be forgiven. 

Unfortunately, you have to go back to the lending institution that approved your loan and ask for the loan to be forgiven.  All of your ducks are going to have to be in a row, because the lending institution that processed your loan has a conflict of interest when you ask for forgiveness.  The lending institution will make the decision on forgiveness.  If the loan isn’t forgiven, the lending institution will be paid by the government for servicing your loan. 

The money you get in a PPP loan will have to be spent and documented just right, or the loan will not be forgiven.  I have produced a YouTube video that overviews the problem. 

The Treasury Department and the Small Business Administration (SBA) are administering the loans, but the Department of Labor has been charged with compliance.  The penalties are very stiff for businesses that don’t comply.  For example, businesses are required to notify employees through posting signs, email, and/or snail mail about the benefits they are afforded under the Families First Coronavirus Response Act.

The Gold Rush of applying for loans to get the money is still going, but as with all 1,000 page bills, there are a ton of “gotcha provisions” that small businesses are expected to comply with.  You know in your gut that the government isn’t going to give you money without strings attached.  You are right.  For people who are CERT users, we have Q&A sessions two or three times a week.  Rules and regulations are being generated almost daily.  The rules and regulations are tying more and more strings around the government assistance programs.  This coming Tuesday, I am going to open up my CERT Q&A for all of my friends.  Register here if you want to participate. 

Stay well, and let’s survive this coronavirus mess.