Six Best Practices to Help Your Business File for PPP Forgiveness

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If your business received a Paycheck Protection Program (PPP) loan, you should consider these six best practices to help your business file for PPP loan forgiveness.

Six Best Practices to Help Your Business File for PPP Forgiveness

Keep Good Records and Track

At the earliest, you should set up a dedicated account for the PPP funds. This will make it easier to track and later substantiate your expenses with the bank statements. Keep in mind, any portion you cannot confirm will convert into a 24-month loan at 1% with no prepayment penalty.

Stay Focused on the Key Factors

According to the PPP Forgiveness Act , you must confirm that your business used 60% of the loan for qualifying expenses. For example, you should use the loan for payroll, compensation, gross salary, gross wages, tips, and healthcare expenses. The other 40% must be used for non-payroll, business-related expenses. For instance, utilities, gas, water, rent payments, mortgage interest payments

Remember the Process

For local businesses, the SBA’s recent extension of the timeframe for using the PPP funds is welcome news. Depending on when you filed your loan, you now have 8 weeks to 24 weeks. And, if you use all your funds, you can file sooner than 24 weeks.

Talk to Your Accountant

Before filing with the bank, we recommend talking to your accountant or tax expert. They will help answer questions about calculating your expenses, identifying payroll taxes, and documenting your filing for forgiveness.

Be Prepared When You File

The more prepared you are, the smoother the process will be when you file.  So, make sure to include these important documents with your filing:

  • Bank account statements for past two months identifying expenses
  • Tax forms or equivalent third-party payroll service reports for the 8- or 24-week period
  • Form 941 for quarterly payroll tax filing or something similar
  • Rent and or utility expenses (receipts or canceled checks)

Talk to Your Dime Banker

If you are a business owner, sole proprietor/practitioner or financial officer, Dime is here to work with you through this crisis. Speak to your Dime banker who assisted you during the loan origination. Or, visit dime.com/branches to find your local Dime branch.

For more information about Dime Community Bank, you may visit dime.com or call 800-321-3463.

Need Help with Financing Beyond PPP?

Your community bank is a great resource. Learn about these five resources to consider for financing the immediate needs of your business.

Need Help with Cash Management?

Learn about the 8 essential cash management tools for small businesses.

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