How to Return Your PPP Loan
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If you’re one of the many small business owners who received a Paycheck Protection Program (PPP) loan, you may be wondering how to return it. Here’s a step-by-step guide on how to do just that.
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What You Need to Know Before You Start
The Paycheck Protection Program (PPP) loan forgiveness application process can seem daunting, but we’re here to help you through it. This guide will explain what you need to do in order to return your PPP loan . We’ll cover everything from understanding the application process to gathering the required documentation.
What is a PPP loan?
A PPP loan is a loan that is available to small businesses and self-employed individuals in order to help them cover their expenses during the COVID-19 pandemic. The loan is forgiven if you use it for eligible expenses, such as payroll, rent, or utilities, and you maintain your workforce.
What are the requirements for returning a PPP loan?
The SBA has released additional guidance related to returning PPP loan funds. The SBA has said that it will forgive loans if certain requirements are met. But what if you can’t meet those requirements? Or what if your business has changed and you no longer need the money?
The SBA says that you can return the loan without penalty if you do so within five business days of receiving the loan. After that, you will need to provide a reason for returning the loan. The SBA says that “Extenuating circumstances exist if the Borrower cannot access needed capital elsewhere.”
If you have any questions about whether or not you can return your PPP loan, please contact us. We are here to help!
How to Return Your PPP Loan
The PPP loan forgiveness process can be complicated, but we’re here to help. In order to apply for loan forgiveness, you’ll need to fill out and submit the Loan Forgiveness Application to your lender. You’ll also need to provide supporting documentation, which may include payroll records, tax forms, and other financial documents. Check out our step-by-step guide on how to return your PPP loan.
Step 1: Determine if You Qualify
The first step in returning your PPP loan is to determine if you qualify. The SBA has released new guidelines that state that borrowers must return the loan if they:
-Are unable to show that they used the loan for payroll expenses, rent, utilities, or mortgage interest;
-Did not maintain employee headcount; or
-Reduced employee wages by more than 25%.
If you do not meet one of these criteria, you will not be able to return your PPP loan.
##Step 2: Calculate Your Forgiveness Amount
Once you have determined that you qualify to return your PPP loan, you will need to calculate your forgiveness amount. To do this, you will need to:
-Add up all of the eligible expenses that you used the PPP loan for; and
-Subtract any EIDL advances that you received from the total amount.
The forgiven amount cannot exceed the original amount of the PPP loan.
##Step 3: Prepare Your Documentation
To return your PPP loan, you will need to prepare documentation that includes:
-A letter from a authorized representative of the business indicating that the business understands that it will not be eligible for forgiveness and is returning the entire amount of the loan;
– Documentation supporting the eligible use of funds for payroll expenses, rent, utilities, or mortgage interest; and
– An explanation of why you are unable to meet the forgiveness criteria.
##Step 4: Contact Your Lender
Once you have assembled all of the required documentation, you will need to contact your lender and provide them with everything they need in order to process your request. Each lender has their own process for returning PPP loans, so be sure to follow their instructions carefully.
Step 2: Prepare the Necessary Documentation
To prepare for your meeting with your lender, you’ll need to have the following documentation available:
-Your business’s Articles of Incorporation or Organization
-Your business license
-Your Tax ID number
-Your business bank statements from the past 6 months
-Proof of income for the past 6 months (this could be through tax returns, accounting records, or other financial statements)
-A list of your business’s expenses for the past 6 months
-Your most recent pay stubs
-Your most recent personal tax return
Step 3: Submit Your Loan Forgiveness Application
The PPP loan forgiveness process is now open for small business owners. Here’s what you need to know to get started.
The first step is to submit your loan forgiveness application to your lender. You can find the application and instructions on the SBA website.
You’ll need to provide your lender with documentation about your eligible payroll and non-payroll expenses, as well as your average monthly payroll costs. Be sure to keep all of your documentation in order, as you’ll need it to support your application.
Your lender has 90 days to review and approve your loan forgiveness application. Once approved, the SBA will forgive the remaining balance of your PPP loan.
You may be required to make additional payments if you don’t submit a complete application or if you are found to have used the loan for ineligible expenses. So be sure to review the instructions carefully and consult with your accountant or financial advisor if you have any questions.
What Happens if You Don’t Return Your PPP Loan?
You Will Be Required to Repay the Loan in Full
If you do not return your PPP loan, you will be required to repay the loan in full. You may also be subject to additional penalties and fees.
You May Be Subject to Additional Penalties
If you don’t return your PPP loan, you may be subject to additional penalties. The SBA may impose a civil monetary penalty of up to $7,500 for each occurrence if you knowingly make a false certification. You could also be fined up to $250,000 or imprisoned for not more than five years, or both.
