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:
- 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.
- 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.
- Documentation for the intended “use of cash” in the eight-week period following funding.
- Documentation to support guaranteed payments to owners (K-1s).
- 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.
- 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.
- 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.
Jenn has more than 25 years of outsourced accounting and finance experience, with a particular expertise in startups and the advertising and creative production industries. She is passionate about seeing companies utilize the latest accounting technology to maximize their efficiency, productivity, and ultimately, success.
Before joining Armanino, Jenn founded and led Team Jenn Corp., a firm dedicated to the strategic financial management of startups and small businesses, offering a comprehensive back office solution with accounting, finance and HR solutions. Previous roles include stints at advertising giant Ogilvy and Mather, and in the cash management industry.
Jenn has a bachelor’s degree in economics from Pepperdine University and is a member of several professional associations including the National Society of Accountants, ProVisors and the Women’s Business Enterprise Network.