California Accountant CPA for PPP Loan Forgiveness Application
Call the California accountants and CPAs at Cook CPA Group for information about PPP loan forgiveness applications to help your business in tough times.
The coronavirus pandemic has caused significant financial distress for small business owners. Some companies were forced to close their doors, and others are struggling to adapt to the new way of providing services during the pandemic. Fortunately, Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide business owners with Paycheck Protection Program (PPP) loans to keep their business alive. If you need assistance with applying for forgiveness for your PPP loan, you should consult with an experienced California accountant for PPP loan forgiveness as soon as possible.
At Cook CPA Group, our PPP loan forgiveness accountants provide financial assistance to many small businesses that have been affected by the pandemic. We know the difficulty of maintaining a successful business during these unpredictable times, and we are ready to fight for you.
How PPP Loan Forgiveness Applications Work in California
The Paycheck Protection Program supplies small businesses with loans if they have experienced hardship successfully operating a business during the pandemic. The PPP loan was designed to provide small business owners with income to cover up to 24 weeks of payroll, mortgage payments, and other expenses that may arise until December 31, 2020.
It would be wise to apply for a PPP loan because they provide a lot more benefits than typical business loans. For example, the interest rate for a PPP loan could be as low as one percent for a loan with a five-year maturity date. The maturity date of a loan is the date that the final payment of the loan is due.
The possibility of loan forgiveness provides a great incentive to apply for a PPP loan. Loan forgiveness means that the borrower will not have to repay the loan. As a result, a business owner can receive all the benefits of the PPP loan while also not required to pay off the loan.
The loan forgiveness application is available on the Small Business Administration website. There are several questions that must be answered, including the financial status of your company to a breakdown of how the loan funds were used. If you are unsure about the requirements to successfully file for PPP loan forgiveness, we can help you get started on your application.
The SBA has set some stipulations that should be considered when applying for loan forgiveness. A borrower of a PPP loan can file their loan forgiveness application at any time before the loan matures.
Additionally, a small business owner can file the loan at any point before the end of the “covered period” if they have used all the funds from the loan. The covered period of the PPP loan is the timeframe provided to a company to spend the entirety of the PPP loan. Borrowers can now choose whether their covered period is 8 weeks or 24 weeks after the distribution of the loan.
Note, however, that at least 60 percent of the PPP loan must be assigned towards payroll costs. If a business owner uses less than 60 percent for payroll costs, the loan cannot be fully forgiven. Having to lay off an employee will not automatically disqualify a business owner from full forgiveness of the loan. If the business owner rehires an employee prior to December 31, 2020, they can still be eligible for full forgiveness of the loan.
It is important to note that a borrower must apply for loan forgiveness in no more than 10 months after the end date of the covered period. If a borrower does not file within 10 months, the loan will not be deferred, and the business must begin paying off the loan.
The Cook CPA Group would be honored to help you manage your loan forgiveness application. To learn more about eligibility for a PPP loan, you should continue reading and contact our skilled Roseville CPAs for loan forgiveness application.
Small Business Eligibility for PPP Loan Forgiveness
To be eligible for a PPP loan, there are various requirements that must be met by a small business. One of the first conditions for eligibility is that a company must have 500 or fewer employees to qualify as a small business. Note, however, that this rule can be applied differently in certain circumstances. For example, if the company in question is a restaurant chain, the fewer than 500 employees requirement may be calculated based on each individual location.
Additionally, a business must have a tangible net worth of less than $15 million. Also, the average net income after federal income taxes cannot exceed $5 million for the last two fiscal years.
Small business owners should also ensure they only use PPP loans for their intended purpose. If the SBA discovers that PPP loans were used for non-business purposes, this can lead to civil or possibly criminal liability.
Consult with Our Experienced California Accountant + CPA for PPP Loan Forgiveness Applications
If you need assistance to file a PPP loan forgiveness application, you should contact an experienced California CPA for PPP loan forgiveness. The skilled accountants at Cook CPA group are here to assist your company through tough times.