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Watch: PPP Loan Forgiveness Analysis and Options

May 10, 2020

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Did your business receive a Paycheck Protection Program (PPP) loan? This webinar will provide the guidance and steps to take now to ensure loan forgiveness. The UHY team helps you understand the loan forgiveness compliance process and points your business needs to consider. Additionally, the presenters will briefly discuss alternatives to a PPP loan as well as new tax opportunities introduced by the CARES Act.


Thomas Alongi, Managing Director, UHY; Chad Kime, Managing Director, UHY; Ali Baydoun, Principal, UHY

Loan Forgiveness Resources:

Steps To Take To Ensure Loan Forgiveness For PPP

If your business received a Paycheck Protection Program (PPP) loan, it’s important to know that loan forgiveness does not automatically apply to everyone. While further guidance from the federal government is still needed, there are steps to take for businesses interested in receiving loan forgiveness for their PPP loan after receiving the funds.

Experts from the UHY team joined the Detroit Regional Chamber’s Restart Michigan Webinar Series today to break down the loan forgiveness compliance process and the key points businesses should consider. First and foremost, businesses need to thoroughly document all expenses paid with the loan within the eight-week period. It’s critical that businesses can show how their expenses were essential and that the loan was used responsibly.

“Everything has to be done within reason and have a justifiable purpose,” said Ali Baydown, principal at UHY. “It has to be documented with a business reason.”

Businesses should consider establishing a separate bank account for these funds and prepare an eight-week forecast showing how the proceeds are used. When it comes to determining allowable uses, UHY specifies:

  • Payroll costs: Gross cash compensation earned, leave, dismissal or separation pay, health insurance costs, retirement plan contributions, and state and local employment taxes
  • Interest on mortgages: Includes real property and personal property, excludes principal
  • Rent payments: Includes rents under lease agreements
  • Utility payments: Electricity, gas, water, telephone, internet access

Companies should note that no more than 25% of the amount forgiven can be attributed to non-payroll costs. Baydown also added that having access to other forms of liquidity could disqualify some businesses from certification for loan forgiveness.

Managing Director Thomas Alongi said he is hopeful that the eight-week period will be extended for businesses, in light of many continued “stay-at-home” orders. For now, what’s most important is for businesses to thoroughly document the impact of the COVID-19 on their costs and operations and to identify all sources of capital.

“For many, it will be a bandaid, for some, it will be a bridge,” said Alongi on the PPP loans. He added that businesses should look at what other liquidity they will need moving forward.

For now, there are several unanswered questions on what qualifies for certification. These include cost incurred vs. cost paid, what qualifies as a utility, details on exemptions, and what happens if the PPP loan funds are not used during the eight-week period. Moving forward, businesses should look for further guidance from the SBA for clarification.

Download Materials From Presentation:

Materials from Presentation:

UHY Presentation on CARES Act

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