Tom R. Hager, Contributor for Forbes
This article specifically addresses those businesses or sole proprietors that received or will receive the PPP money.
If you were lucky enough to be allocated some of the PPP money, congratulations, many applied but few were chosen. The money from this program dried up in just 13 days. There is a new proposal for an additional $250 billion of funding for small businesses; beware that this round also will go quickly, I have heard in as little as 24 hours.
So, I know what you are thinking based on interaction with clients – I must spend all this money so I can get it all forgiven. My advice is to: Get that thought out of your head!
The new Coronavirus Aid, Relief, and. Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA Act) initiated various loan programs, tax credit programs, and deferral programs that all intermingle with one another. If you opt for one program, it may preclude you from using another one of the programs.
PPP is a two-step process:
- Get the Money – you did that!
- Spend the Money – this is what this article is about, and the calculations are a little tricky to figure out if an expense is forgivable or not!