Cory Parnell, CPA and Chief Executive Officer at MGI North America member-firm Boeckermann Grafstrom & Mayer (BGM), presented “Should You Return or Turn Down the PPP Loan?” on May 5, 2020. This presentation takes a closer look at the SBA’s FAQ 31, stating that anyone who received PPP funds has until May 7, 2020, to return unneeded funds without violating the “good faith” certification made about suffering economic harm. This response has likely been issued due to the negative publicity about public companies and private banks receiving both PPP loans and preferential treatment.
Shortly after the presentation, the SBA published FAQ 41 stating that the date to return the PPP loan funds has been extended to May 14, 2020. Borrowers do not need to apply for an extension. Although this presentation covers SBA’s FAQ 31, we recommend that you still watch the presentation and estimate your company’s net cash requirement and identify sources of funds.
Generally, if your business:
- Is experiencing revenue decline related to COVID-19 and no alternative liquidity sources are available to meet payroll costs over the program’s eight-week period, you should be fine accepting the funds.
- IS NOT experiencing a COVID-19-related revenue downturn, it is recommended that you should return or decline PPP funds.
About Boeckermann Grafstrom & Mayer
Founded in 1982, BGM is a firm of entrepreneurial and proactive CPAs and Advisors. We understand and appreciate the entrepreneurial spirit that can exist inside any business because it exists inside our own. We anticipate needs, generate ideas, provide insight, and identify opportunities. Through our auditing, accounting, tax, and advisory services, we’ll work with you to create innovative solutions to help grow your business, achieve your goals, and realize your passion. BGM has offices located throughout Minnesota in Bloomington, St. Paul, and Sauk Centre, as well as Naples, Florida.