Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

April 14, 2020

SBA PPP Loans: What Additional Documentation to Provide

Posted by Jenn McCabe

In the last few days, many consumer banks have been asking borrowers for more information to augment their SBA Paycheck Protection Program (PPP) loan package.  

There is no consistency in the process. Some banks are providing loan identification numbers, or even SBA loan identification numbers.  In some cases, funding is promised this week, and in others it’s promised in three to four weeks.  

Be ready to provide additional documentation, which may include:

  1. 2019 payroll tax returns, including Form 940 and quarterly Form 941s.  Professional employer organizations (PEOs) can provide reports that will satisfy this request, but banks may need to be walked through it.
  2. One or two payroll journals from the base period, along with a copy of the bank statement where the payroll debit can clearly be seen as evidence of a standard cash requirement.
  3. Documentation for the intended “use of cash” in the eight-week period following funding.
  4. Documentation to support guaranteed payments to owners (K-1s).
  5. Support for the loan basis calculation, including average payroll and other payroll expenses.  This is especially pertinent for companies using payroll processor provided reports that were incorrect.
  6. Headcount for “positions retained” or “positions created” is being requested.  We are interpreting those questions in light of the interim guidance, which means 1) average headcount or full-time equivalent (FTE) over the base loan period, 2) headcount on February 15, 2020, pre-pandemic, and 3) headcount expected on June 30, 2020.
  7. Information regarding any ownership of other entities that are related to shareholders with more than 20%.

Armanino can help. Let us know if you’re getting these questions. And visit our COVID-19 Resource Center for more information on keeping your business running during disruption.

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