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.
The Fed’s recent action capping dividend payments might prove inadequate once the coronavirus crisis really hits banks’ capital.
Brij Sharma is the Co-founder and a Managing Partner at NTV. Brij has more than 25 years of experience as a successful entrepreneur and investor in the U.S., India, and GCC Region.
Brij founded Tela Sourcing, Inc., an outsourcing company focused on servicing the U.S. healthcare insurance market. Tela served more than 50 health insurance clients and was recognized by Gartner as one of the leading specialized company in healthcare services. Brij successfully sold Tela to TriZetto, Inc., a healthcare technology and solution company controlled by Apax Private Equity.
Most recently, through a joint venture with Davita Inc., Brij founded Express Clinics, a network of owned primary care and population health management centers in India. Davita is a Fortune 500 U.S.-based healthcare company. Ultimately, Brij provided a successful exit to Davita by purchasing their shareholding.
Brij is also the Founder of MDIndia, one of the largest third-party administrators of health insurance services in India. MDIndia manages more than 40 million lives, processes over $1 billion in premiums and provides healthcare access through a contracted national network of more than 4,500 hospitals and healthcare centers.
Brij has an MBA from Yale University and is an engineering graduate of the College of Engineering, Pune, India. Brij is an active investor and has ongoing involvement with ventures in the healthcare technology, outsourcing, and mobile commerce space. Brij has also been an advisor since 2010 to the $50 million Somerset Private Equity Fund, which is focused on healthcare investments in India.
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.
