PPP Webinar Recap: Key Points to Remember

We were thrilled to have Larry Trujillo join us for a webinar last week. Larry has a wealth of experience in corporate deal structuring and SBA lending programs—including the Paycheck Protection Program (PPP) and its many complexities. He shared some key insights about PPP 1 + 2 and other loans available to businesses during the pandemic.

A few key points we want to highlight:

PPP is still available to you if you haven’t applied yet.

As of today, PPP2 applications are currently only open to very small businesses (19 employees or less) as mandated by the Biden Administration; however larger businesses will still have the opportunity to apply around March 10. There are still a few lenders accepting applications at this time, so you’re able to submit your PPP application – however the SBA will not accept them until March 10. Lenders will process the applications received in the order received when SBA begins accepting all applications again.

Documentation is absolutely critical.

PPP2 borrowing must be “necessary” and “reasonable.” What does that mean? These are subjective terms, so ensure you have a clear argument and basis for why you need the funds. It is imperative to document and keep clear records of everything related to your loan and the use of funds.

Don’t rush into a forgiveness application.

The situation is very dynamic and the rules have been in a constant state of flux since the beginning of the program, so there’s no reason to rush into requesting loan forgiveness. As a general piece of advice, Larry recommends waiting as long as possible to apply, as rules may shift to be even more favorable to businesses. The important deadline in the PPP forgiveness process doesn’t surface until 10 months after the end of the loan’s covered period.

Be smart about EIDL applications.

Economic Injury Disaster Loans (EIDL) are still available. Just remember, you can’t use this type of loan for the same purpose as your PPP loan.

Take advantage of other loan programs.

As we often say, times of calamity are often a time for opportunity. While the PPP program can’t be used to finance growth, acquisitions, and/or any other non-payroll/operational related purposes, there are other SBA, government, and conventional programs available to you that can help.

Perhaps most importantly: seek professional tax help.

These loans are complicated, especially if you add in-state lending and state tax treatment of loan forgiveness. Please reach out for professional tax counsel on these issues and to help make sure your tax returns correctly account for any quirks in state/federal tax treatment.

Information presented in this webinar was prepared by Larry Trujillo. Larry Trujillo is not an affiliate of JSF Financial, LLC or Mid Atlantic Capital Corporation. JSF Financial, LLC and Mid Atlantic Capital Corporation do not promote or endorse the opinions and/or information presented by Larry Trujillo. The opinions expressed in this webinar are not necessarily those held by JSF Financial, LLC or Mid Atlantic Capital, and its affiliates or subsidiaries.

Securities are offered through Mid Atlantic Capital Corporation (“MACC”) a registered broker dealer, Member FINRA/SIPC. Financial advice is offered through JSF Financial, LLC, A Registered Investment Adviser. JSF Financial, LLC is not a subsidiary or control affiliate of MACC