How do you prepare for Paycheck Protection Program (PPP) loan forgiveness when your loan is greater than $2 million? It kind of feels like running in the dark while blindfolded. This article will take you through the approach we have taken to prepare for filling the forgiveness application. This article will also provide recommendations about which finance documentations you should have prepared. If you are audited several years from now, this information will prove beneficial to support the pandemic environment you encountered in your company when governing authorities shut down businesses.
Get Organized
Determine the items that are the most impactful to your company’s finances.
Documentation
- Prepare a detailed write up of facts and events leading up to the PPP loan application. Remembering those events several years from now may be difficult. Good documentation will help you defend your need for the PPP loan. Begin with your company’s condition before you filed your application and upper management’s thought process that led to you applying for the PPP loan.
- Build a history of the impacts associated with the COVID-19 shutdown. Impacts can include financial, manpower, supply chain disruption, access to capital, and almost anything else you can think of that impacted your business.
- Documentation to support your need to apply for the PPP loan. The following documentation will assist your memory of events when you are audited several years from now:
- Debt-to-equity forecasts – forecasted future profits, losses, and eroding equity. Even if your business was fortunate enough not to suffer major impacts, what you forecasted will help justify why you applied for the PPP loan.
- Revenue loss – in the construction industry, specific jobs w