Do you have a PPP Loan? Start your forgiveness application process as soon as possible
- PPP Loan is a liability on your balance sheet until it is formally forgiven
- The PPP forgiveness process can take as long as 5 months
- The excess net capital calculation can be adjusted for the PPP loan
- Your PPP Loan is required to be audited if you have not received formal forgiveness
- Start your forgiveness application with your lender as soon as you have enough forgivable expense
If your firm has taken a Paycheck Protection Program (“PPP”) loan, the CFTC and the NFA have issued guidance that the full amount of the loan should appear as a liability on your balance sheet until your firm receives notice that the loan is forgiven. As the lender has up to sixty days to review your forgiveness application and the SBA has an additional ninety days to confirm the lender’s decision, the forgiveness process could extend for a very lengthy period of time and past your December 31 year end.
While the CFTC and NFA will allow an adjustment to liabilities for the amount to be forgiven so that your excess net capital computation will be unaffected, if forgiveness has not been obtained at the time of your audit, we will be required to examine the forgiveness amount. This extra audit work could be time consuming and costly for both of us. Therefore, we recommend that once you have incurred enough forgivable expenses to cover the PPP loan balance, you expedite your filing of the forgiveness application with your lender to obtain a decision on forgiveness as soon as possible.
Instructions and the application can be found by clicking here.
If you have any questions on the forgiveness application or need help in the filing process, please give Mike Coglianese a call at 630-351-8942 or email Mike@cogcpa.com.