Got a PPP Loan? Here’s How to Make Sure You Get Loan Forgiveness

Article originally posted on Phoenix Business Journal on April 22, 2020

Nearly 20,000 Arizona businesses have received Paycheck Protection Program loans collectively worth $4.85 billion during the first round of funding.

And most of that money could be forgiven under the terms of the loans if the recipients follow certain rules over the next eight weeks. Getting that forgiveness will be critical for many businesses as they try to stay afloat through the coronavirus pandemic.

The PPP offers companies and nonprofits with fewer than 500 workers a 1% interest loan to cover two months of payroll and other expenses. The program has a $10 million limit per customer. Borrowers must use the money for payroll costs, mortgage interest, rent and utilities payments over the eight weeks after getting the loan. About 75% of that money must be used to cover payroll costs.

Businesses that do not maintain staff and payroll will owe money back. They have until June 30 to restore full-time employment and salary levels and will have to show the receipts to their lender.

James Lozano — a partner at BST & Co. and leader of the CFO for Hire division — said he’s focused on helping companies get the most out of the PPP, including how they should track their expenses during this time.

“We’ve been talking with clients about preparing for forgiveness. It’s going to come upon you very quickly here,” Lozano said. “You got the money on Thursday and that clock currently starts ticking right away for that eight-week period.”

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Nearly 20,000 Arizona businesses have received Paycheck Protection Program loans collectively worth $4.85 billion during the first round of funding.