FINSYNC is helping the businesses who received funding from SBA’s PPP loan by offering them a free forgiveness guide, forgiveness calculator, and access to a network of accounting professionals who are trained to help if one has questions or needs assistance.
For the banks and credit unions that made PPP loans, FINSYNC is providing a portal through which all of their business customers can upload forgiveness calculations and supporting documentation. Our goal is to help lenders process forgiveness applications efficiently, and offer automated uploading to SBA’s ETran when that becomes available.
The Payroll Protection Program (PPP) funded more than 1.6 million small businesses across the country earlier in April. The second round (PPP2) is (as of this writing) funding hundreds of thousands more small businesses with 2.5 months of payroll costs. The administrative hurdles to apply for a PPP loan were fairly low, although the competition to get a loan was very high. The first PPP money ran out in 14 days. Round 2 is expected to last hours instead of days. Perhaps there will be a 3rd round, but we don’t know that yet. In the meantime, approximately 3 million businesses will have what amounts to ‘free money’ to help them stay afloat and keep employees on the payroll. Then the fun of forgiveness tracking starts.
What Is Forgiveness Tracking?
When Congress created the CARES Act, the PPP provision stated that these loans could be 100% forgiven. The stipulations behind forgiveness are mostly clear. Up to 100% of the principal amount of the loan may be forgiven if:
- You use the proceeds on qualified expenses. Such as maintaining support for at least the number of jobs you had when applying, and funds were used for:
- Payroll costs (excluding 1099 contractors)
- Group health insurance benefits, paid sick leave, medical and insurance premiums
- Mortgage or rent payments
- Interest on any other debt obligations that were incurred before the loan period
- At least 75% of the amount used must be for payroll to qualify for maximum forgiveness, the remainder may be used for other qualifying expenses.
- To qualify for forgiveness, expenditures for both payroll and other expenses must occur within 8 weeks of receiving the loan (aka, the funding date)
Those are the requirements. The “tracking” portion of the equation about tracking, documenting, and proving to your lender and the SBA that you did indeed use the money for these purposes.
How Is PPP Spending Verified?
The PPP loans require payments to begin 6 months after the funding date. In order not to have to make any payments, the borrower must submit documentation to their bank. The bank must then certify that they have reviewed the documentation, and then submit the documents and their certification to the SBA.
The problem is, there’s no standard for documentation, nor the collection and submission of that documentation. That’s why we put our heads down and built a calculator for any business to track their PPP expenditures and why we’ll soon be launching our PPP Forgiveness Tracking App, so businesses can submit and banks can easily accept, track, certify, and submit forgiveness documentation to the SBA.
The FINSYNC PPP Forgiveness Calculator includes:
- A complete guide to forgiveness requirements
- Thorough instructions on using the calculator
- A straightforward worksheet to help you calculate your forgiveness amount
- An example of a completed forgiveness calculation