The Paycheck Protection Program (PPP) was created to help small business owners facing hardship during the coronavirus pandemic. For some small business owners, the PPP loan was the difference between remaining in business or being forced to dissolve their company. The possibility of having the PPP loan also forgiven greatly assists business owners. If you need assistance having your PPP loan forgiven, you should consult with an experienced Roseville accountant for PPP loan forgiveness. At Cook CPA Group, our skilled accounting team is ready to help you apply for a PPP loan forgiveness application to decrease the impact of the coronavirus pandemic on your financial situation. Our CPAs would be pleased to speak with you about how long you have to file a PPP loan forgiveness application.
Timeframe for Filing a PPP Loan Forgiveness Application in California
It is understandable to have some confusion about when a PPP loan forgiveness application must be filed. As Congress continues to create new rules regarding the terms of the PPP loan, many business owners have become uncertain of their obligations concerning forgiveness for the loan.
On June 22, 2020, additional rules were released regarding applications for loan forgiveness. These new rules stated have listed multiple scenarios where a business owner can file their application. For example, a business owner can file their loan forgiveness application on or before the date of the maturity of the loan. The maturity date of a loan is the final date for the loan to be paid in full.
Additionally, instead of waiting for a certain period of time before filing the forgiveness application, a small business owner can also file their application after they have used all of the proceeds from the loan. However, there are some circumstances that affect the borrower’s filing of the application. For example, if the employer decreased employee wages by more than 25 percent, they must supply a valid explanation for the excessive reduction.
Note, however, that if a small business owner does not apply for PPP loan forgiveness within 10 months of the covered period, the loan will not be deferred, and the business owner must start making payments on the loan. The covered period refers to the timeframe in which a small business must use the PPP loan funds. Currently, borrowers can request a covered period of 8 or 24 weeks.
New regulations were passed to allow borrowers to file for forgiveness before the end of the covered period to give business owners more freedom to document their expenses. If your company is having difficulty with managing accounting for a PPP loan in addition to routine accounting practices, Cook CPA Group is here to assist you. We recognize that PPP loans are relatively new and can be burdensome to manage, and we are here to alleviate your concerns.
To learn more about the benefits of PPP loans, you should continue reading and consult with our experienced Roseville accountants.
Advantages of PPP Loans for Small Businesses
Not only can a small business owner apply for loan forgiveness, but PPP loans also assist a company and its employees in a number of ways. Many of these benefits were provided as legislators realized that the coronavirus pandemic would continue to impact businesses for months after restrictions and social distancing orders have been eased or lifted entirely.
One advantage of securing a PPP loan is that the loan is guaranteed without having to link the loan to collateral or personal guarantees. As a result, the borrower does not have to assume the debt if they default on the PPP loan.
Another benefit of a PPP loan is that they have significantly low-interest rates. Specifically, a borrower can secure a 1% interest rate on a PPP loan with a five-year maturity date. This is a stark difference in comparison to Small Business Administration loans that can reach up to eight percent for interest.
PPP loans can be used for a number of reasons. As mentioned, PPP loans can be used for payroll to avoid having to lay off employees due to loss of income. Specifically, a PPP loan may even be used to increase an employee’s salary to as high as $100,000 and can also be utilized to manage health benefits for an employee.
It is also expected that the PPP loan would be used for other business-related expenses like mortgage payments, rent, and utilities for the rental property.
If you are uncertain about the PPP loan application process, our certified public accountants can help you file your application today. PPP loans can make a substantial impact on a business that is struggling due to the COVID-19 pandemic. We are ready to help you apply for loan forgiveness that can help ensure that your business remains in operating during these unpredictable times.
Speak with Our Skilled California PPP Loan Forgiveness Accountants to Discuss Your Application
If you wish to file a PPP loan forgiveness application for your small business, you should contact an experienced California CPA for PPP loan forgiveness. At the Cook CPA Group, our CPAs possess a broad range of experience in a number of financial matters, and we would be happy to work with you to apply for PPP loan forgiveness. To schedule a free legal consultation to discuss your PPP loan forgiveness application, contact the Cook CPA Group at (916) 432-2218. You can also contact us online.