The SBA is now reconsidering the small business owners you were shut out during the early days of the paycheck protection program in the previous rounds. There are several reasons why PPP Lending & Forgiveness loans automation does not end well for them. The primary root cause is hidden in the documentation of small business owners seeking the funds from the Paycheck Protection Program.
A missing signature can easily damage your PPP loan application for several days or even weeks. Delaying of the process may seem a bit difficult for those who need financial help on desperate terms. Further, the unorganized record can lead to terrible headaches when you have to show every record of a dollar spent in your PPP loan. This article will help you by stating the dos and don’ts to avoid rejection in the second round. Apply the following practices so that the small business owners can get their loan funded and forgiven at the moment.
Do: Collect your documents in advance.
It would be quite beneficial for you to record your documentation when applying for the PPP loan. Thoroughly read up the details of the program and understand the eligibility criteria to apply. Afterwards, please make a list of the documents and pull together each one of them or the necessary paperwork. The minimum requirement would be of payroll documents and tax statements. Bank statements, receipts, purchase orders and cancelled checks.
Don’t: Jump the Signatures.
Missing of a signature can easily delay the application of days and weeks. Always triple check every statement and document and have a signature on it before the submission of your paperwork. Most of the times people carelessly forget to sign their paperwork which takes them back at the initial point. By doing so, they lose their actual position in the line.
Do: Get a second business bank account for a PPP loan.
Combining both the business and personal expenses in one bank account can easily create chaos when applying for a PPP loan. Infact PPP loan forgiveness software can get confused to separate the records. Therefore, a separate bank account for your small business can easily prove that the company was in operation on Feb 15, 2020, which you need to present to qualify for a PPP loan.
Don’t: Use the PPP money on unsuitable expenses.
The PPP loan is a grant that should be used for the proceeds outlined by the Small Business Administration. To emphasize it more, the bulk of your funds must be utilized on payroll costs, such as salaries, hourly wages, paid sick leave and group insurance benefits. The remaining funds can get utilized on a broader range of expenses, including operating expenses, health and safety modifications and individual supplier costs.
Do: Maintain a relationship with your lender.
Make sure to have more than a transactional relationship with your lender or your bank. They should be aware of you and your business on a personal level. Doing so will eliminate the chances of you being a faceless request for PPP loan application. It is essential to build relationships with people you will need before you need them as a small business owner.
Don’t: Go for it alone.
Completing the PPP loan application can be a bit heavy, especially when you have a workforce of about a dozen. Learn to approach PPP loan forgiveness software or your accountant to pull the reports that are needed to apply. It is vital to find a resource that can support and navigate you in the process.