The COVID-19 pandemic has upended lives across the country as officials struggle to curb its spread. As cities and states have put restrictions in place to slow infections, businesses of all kinds have felt the financial squeeze.
Certified public accountants have helped guide their clients through this troubling time as they try to navigate the sudden financial strain the pandemic has brought. The CARES Act provided some relief for businesses, dispersing more than $525 billion through the Paycheck Protection Program. As the time comes for businesses to apply for PPP loan forgiveness, CPAs can provide vital assistance to ensure success for their clients. Here are some things to keep in mind while helping clients with PPP loan forgiveness.
Do your clients qualify?
Your client was able to secure a PPP loan early on in the pandemic that helped them stay afloat. But, are they eligible for loan forgiveness now? This is an important question that business owners are counting on their accountant to make clear for them. CPAs need to keep their clients informed of the requirements throughout the loan process to ensure they qualify for full forgiveness. Keeping the right number of employees on the payroll and avoiding big payouts are important factors that will affect a business’s qualification for forgiveness. A CPA can help clients meet this and other requirements before submitting their application.
Completing forgiveness applications
It’s no surprise that PPP loans can be confusing, especially for business owners dealing with a mountain of stress just trying to keep food on the table for themselves and their employees. Having a good CPA on their side is an invaluable aid for business owners during these difficult times.
Troy Vosseller is the Co-Founder of gener8tor–a Midwest-based venture capital firm and startup accelerator network. Since 2012, gener8tor has worked with more than 1,000 startups that have cumulatively raised more than $1.4B in follow-on venture capital. Troy came to gener8tor from the University of Wisconsin Law School's Law & Entrepreneurship Clinic, a program providing free legal services to startup businesses and entrepreneurs, where he worked as an Assistant Clinical Professor/Supervising Attorney. As an undergraduate at the University of Wisconsin-Madison, Troy founded the most cliché student startup imaginable–a t-shirt company. It was a success, and today Sconnie Nation continues to market a line of apparel that focuses on celebrating the Wisconsin lifestyle.
Before discovering his love of startups, Troy held brief stints at Qualcomm and Intuit. He holds a BA, MBA and JD from the University of Wisconsin-Madison.
Alex Fuentes has 20 years of experience in start-up and rapid-change environments and is currently Brickeye's Executive Vice President of Strategic Growth and Business Development.
He provides a deep understanding of infrastructure development and cleantech to Brickeye, having served in senior roles within the energy storage and renewable energy sectors. Alex holds an MBA from the University of Toronto's Rotman School of Management and a Bachelor's degree in mechanical engineering from the University of Waterloo.
Lena is a startup veteran with demonstrated expertise in propelling business growth for growth-stage fintech companies. In her role as Chief Revenue Officer at leading life insurance technology company Bestow, Lena Chukhno oversees B2B partnership growth for advisor, embedded and enterprise partners. Companies of every size — from startups to public companies — leverage Bestow's software to launch and sell digital life insurance and improve efficiency and profitability by managing the business online.
Prior to joining Bestow, Lena had a combined role as the General Manager of Student Loan Refinancing and Head of Strategy at Earnest, a mission-driven fintech in San Francisco. Under her leadership, Earnest grew to become the market leader in the education financing space.
Previously, she led business development and growth strategy for the Multi-Asset Solutions division at JPMorgan and spent time at McKinsey & Company in management consulting.
A native of Ukraine, Lena earned bachelor's and master's degrees in finance from Kyiv National Economic University, and an MBA from INSEAD.
Keeping track of expenses and documentation after the loan is received and getting the correct paperwork put together for the forgiveness application is essential. Make sure clients meet deadlines, turn in the correct forms, and stay in touch with their lender throughout the application process. Give clients the confidence that their application is thorough and accurate to give them the best chance of their loan being fully forgiven.
Staying on top of changes
Of course, the confusion that has occurred with the Paycheck Protection Program doesn’t belong just to borrowers. Some CPAs may find they have a few questions along the way as well. Lawmakers hurried to get financial assistance to cash-strapped businesses when COVID-19 shut down the country; there were bound to be a few snags and revisions to the program. The federal government has put out notices and questions and answers to clear up issues along the way, and changes have been made to the program as the pandemic raged on through the year. It’s up to CPAs to stay apprised of these changes and updates to FAQs so they can properly assist clients. There are still more questions to be answered, including tax issues, so this is a continual process.
CPAs can provide valuable assistance to their clients who are doing their best to stay in business in the midst of a pandemic. Stay informed about the PPP loan forgiveness process and give clients a reliable adviser in their corner to guide them through the process.
