Potential New Requirements for $2 million+ PPP Loan Recipients
In an effort to keep you apprised of updates to the Small Business Administration’s Paycheck Protection Program, we are circulating this article concerning loan forgiveness forms that may have been submitted. Specifically, it has come to our attention that the SBA plans to send additional PPP loan questionaries to businesses that received more than $2 million in loans. These questionnaires will focus on the “good faith” certification that businesses made when applying for a loan and ask for subsequent documentation on how these businesses actually fared during the Coronavirus pandemic. Some of the questions include requests for documentation as to whether a business saw a drop in revenue, whether it began any new capital projects after receiving the loan, whether a business owner received $250,000 in annual salary, and more related questions on how the business generally fared during the pandemic. We believe this is an attempt by the SBA to weed out fraud, as the Agency has already announced that it plans to audit all loans over $2 million. This should not cause alarm for every business having received PPP funds, as there is only a small number of loans that exceed the $2 million threshold. The temporary forms are subject to finality by the Office of Management and Budget. If your PPP loan exceeds $2 million, you should have your tax professional carefully monitor the status of the new auditing processes. Please do not hesitate to contact Weiss LLP for additional information.