Comments on: PPP Certification and the New Safe Harbor

By: Stephen Nelson

Stephen Nelson — Thu, 21 May 2020 01:02:23 +0000

In reply to Nathan. Oh gosh, what a messy predicament... Yikes. I guess what I'd think about doing is assume this is an honest mistake stemming for the complexity of the program. Probably they should try to return the money? The $1.2K they should have received isn't so much that it'll save their business. Not worth fines, accountant costs, or general hassle.

By: Stephen Nelson

Stephen Nelson — Thu, 21 May 2020 00:56:45 +0000

In reply to Fer. I don't think so. Sorry. Rent, interest and utilities...that's it.(Well, except for payroll.)

By: Nathan

Nathan — Wed, 20 May 2020 19:30:57 +0000

I’m an accountant and have a client who has received the PPP loan. They are an S-Corporation that has suffered significant loss, however, I believe they have listed their company as a Sole Proprietorship using total net income instead of the S-Corporation W2 wages for the 2.5 x monthly payroll amount and have received a PPP loan amount of 10 times the amount they should have received. For reference, the amount they received was around $12k instead of $1.2k. Giving them the benefit of the doubt and assuming this is negligence, what should they do at this point?

Additionally, what steps would you take if you were in my shoes and they refused to take necessary actions? Would you report them to the SBA’s Office of Inspector General? Would you terminate future services with them?

***I understand that you are not an attorney and am not asking for official legal or tax advice. I am more so looking for an unofficial opinion.

By: Fer

Fer — Wed, 20 May 2020 12:23:31 +0000

Hi Steve,

Do you think that a restaurant liability insurance can be considered an UTILITY for the PPP forgiveness?

Thank you!

By: Steve

Steve — Sun, 17 May 2020 21:36:29 +0000

In reply to Dana.

So, the bank bungled your PPP loan. You shouldn’t have gotten PPP money to pay 1099 contractors. Rather, they should have applied for their own PPP loans.

You should contact the bank and ask how they want to help correct the error. Let me think about this–and maybe someone else will share an idea–but would it work to hire the 1099 contractors? Make them W-2 employees so you can get forgiveness?

By: Dana

Dana — Sun, 17 May 2020 20:23:05 +0000

I’m a Sub S company. I run a personal training business with 1099 trainers. Their commissions help pay the operating costs and grow the business. When the PPP first started I could file for my 1099 trainers so they didn’t file. The bank gave me the PPP amount which included my 1099 trainers and my W2 payroll amount. I don’t know what to do. My trainers need the money but the rules changed. I’m afraid to pay them and I won’t be forgiven. This sucks!

By: Steve

Steve — Sun, 17 May 2020 15:53:43 +0000

In reply to Monica. I don't know. Sorry. I think it depends on your state's laws and rules.

By: Monica

Monica — Sun, 17 May 2020 14:58:52 +0000

As a sole proprietor, I applied for unemployment and PUA in my home state of Virginia. I have also obtained the PPP. Does this mean I won’t be able to get UI and PUA because I have the PPP?

By: Timothy Coleman

Timothy Coleman — Sat, 16 May 2020 20:01:29 +0000

In reply to Steve. Bingo! Often people not involved in managementhave big mouths, with little understanding of the long view

By: Steve

Steve — Sat, 16 May 2020 15:40:15 +0000

In reply to Brian.

Hi Brian,

Check out the blog post I did this morning on the loan forgiveness application (which appeared last night):

http://evergreensmallbusiness.com/paycheck-protection-program-loan-forgiveness-application-tips-tricks-and-traps/

I think the loan application program answers your questions?