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EDC Business Alert- PPP Information You Need to Know

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PPP: INFORMATION YOU NEED TO KNOW
The federal government’s Paycheck Protection Program (PPP), part of the CARES Act, provided business loans that can be forgiven if the right circumstances are met. With the end of the year approaching, the EDC understands that there is a new sense of urgency to complete the actual process of forgiveness. This process can be very challenging and many lending institutions are addressing the information differently. An important note is that the Small Business Administration (SBA) has not finalized this forgiveness process, despite some banks accepting the forgiveness applications at this time. The EDC speculates that the legislative packet that includes guidance on PPP forgiveness processing will not pass until 2021.
EDC RECOMMENDS THE FOLLOWING
1. Communicate With Your Lender
  • Each lending institution will have their own process and timelines to receive and review the forgiveness applications. It is critical to communicate with your lender and make an action plan to return the proper documentation when your lender indicates to do so.
  • Discuss with your lender if your loan note needs to be amended. The Flexibility Act extended the previously defined deferral period, which indicated by what date the forgiveness application needed to be provided to the bank. If your bank would like to amend the note, follow their instructions to do so. If your bank indicates there is no need to amend the note, keep a record of their communication regarding this.
2. Refer to Your Own Lender for Any Additional Documents
Complete the forgiveness application that is provided to you by your lending institution. Do not fill out applications from other banks.
3. Talk With Your CPA or EDC SBDC Financial Advisor
  • If applicable, discuss with your tax advisor on how to file your PPP tax information. Your tax advisor understands your business’ tax situation and can help you determine how best to declare your loan.
  • We encourage you to meet with your EDC Small Business Development Center financial advisor to review any questions you have. You can set up your no-cost appointment today by calling 805.409.9159.
  • For additional information on tax implications, review the U.S. Chamber of Commerce’s CO article “Will You Owe Taxes on Your Paycheck Protection Loan?” CLICK HERE
4. Have Additional Questions?
  • Review EDC SBDC advisor Juliana Ramirez’s PPP forgiveness webinars (partnered with SCORE Santa Barbara). All previous EDC webinars can be viewed on our Previous Events page CLICK HERE
  • Review the SBA’s Frequently Asked Questions on PPP Loan Forgiveness CLICK HERE