Organization is Key: Were Your Finances in Line Before You Applied for Your SBA PPP Loan?
The SBA relaxes the loan forgiveness criteria in mid June allowing you 24 weeks to use SBA funds and to allocate 60% of funds to payroll. This is replacing the previous amount equal to 75%. Furthermore, now is the best time to ask if your finances were in line prior to applying for the SBA PPP loan.
As your business prepares to apply for forgiveness, your loans should be throughly looked over. Prior to applying for the SBA loan, ask yourself, how organized were your business finances? This can make a huge difference when your audits occur. If your finances were not in order before applying and accepting the SBA PPP loan then get them in order. Disorganization or even misreporting finances can lead your business to potential risks when audits begin again on July 15th. You should consider these questions before beginning to prepare for audit:
Did you under-report Wages?
When thinking about your SBA PPP application, did you under-report wages that could allow for more loan to be granted? Banks will ask you to return the total initial loan amount and reapply for the loan with revised reporting. If there are still funds available to return, consider the possibility that you may not get the revised loan. The funds may be depleted before your second application is approved. Furthermore, they may simply be approved for the same amount as your original approval - wasting your time, resources and energy.
Did you submit false information to a government agency?
If, on review of your SBA PPP loan application, you believe that you misreported anything in your application, contact our team at Milikowsky Tax Law. We can review your tax returns from previous years and your current financials to determine how far off your initial statements are and remedy any potential audit exposure you may have.
By doing a full risk assessment and deep dive into your financials, you can mitigate risk for fines and penalties as well as criminal exposure you may have by misreporting your financials to a government agency. Contact us today to see how we can help your business limit your risk in regard to potential audits!