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.
Sandra Cho is the Founder and President of Pointwealth Capital Management in Encino, California specializing in comprehensive, generational wealth management. Ms. Cho serves more than $23 million in brokerage assets through LPL Financial and over $180 million in advisory assets through Golden State Wealth Management as of 10/5/21.
With 18 years in the financial services industry, Ms. Cho has been consistently in the top 5% of financial advisors nationwide in production. She is recognized on the Forbes Top Women Wealth Advisors list for 2020 and 2021.
Ms. Cho is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Golden State Wealth Management, DBA Pointwealth Capital Management, a Registered Investment Advisor. Golden State Wealth Management, Pointwealth Capital Management and LPL Financial are separate entities.
Justin L. Mack was the wealthtech reporter for Financial Planning, as well as the host and lead editorial producer of the Financial Planning Podcast. The Cleveland, Ohio, native earned bachelor's degrees in communication and political science from Purdue University before spending more than a decade as a USA Today Network journalist with the Lafayette Journal & Courier and the Indianapolis Star. His work as a reporter, anchor, moderator and host has earned him awards for coverage of crime, politics, pop culture, business, breaking news and investigations. Justin also serves as a board member for the Indiana Professional Chapter of the Society of Professional Journalists. In addition to exploring the role technology plays in the lives of advisors on a daily basis, Justin covered efforts to address the diversity and culture issues that have plagued financial services for generations.
Nathan Place is a national reporter at American Banker. A native of New York City, he has worked for more than a decade in both print and video journalism. He got his start in Beijing, where he worked as a copy editor and reporter for China Daily. He then returned to New York, where he earned his master's degree from the CUNY Graduate School of Journalism. Since then he's worked as a reporter for the New York Daily News and The Independent, as well as a video producer for the Daily Mail, the Daily Beast and Men's Journal.
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.
