On a recent radio interview, Santa Clarita accountant Matt Denny from Denny & Company discussed recent changes made to the government’s “Paycheck Protection Program” (PPP) loans. He talked about where business owners can apply for the loans, how they can go about having them forgiven and the timeframe for the forgiveness process.
PPP loans were created with the goal of helping small businesses stay financially solvent throughout financial hardships in the wake of the COVD-19 pandemic. In order for businesses to have these loans forgiven, they need to abide by stipulations for how the funds are to be spent.
Denny said that the first PPP loans were designed to support businesses over a period of eight weeks, and required that 75 percent of funds go towards payroll. The Santa Clarita attorney clarified, saying that payroll expenses could include “hiring people that might have been furloughed” as well as paying remaining staff members. The rest of the money was to be used on “utilities, mortgage interest, or rent for the business.”
Recent changes to the PPP program allow for businesses to apply for coverage for 24 weeks of expenses. The requirements have also been changed such that only 60 percent of funds must be spent on payroll, with 40 percent going to utilities, mortgage interest and rent.
“We had a number of clients who received substantial amounts of PPP money who were not going to be able to spend 75 percent of it on payroll in time because they’d let people go,” the Santa Clarita accountant explained. “There were some employees that are getting a better deal unemployed because of how generous (unemployment benefits are) this time around.”
Denny continued, saying that this update to PPP loans “was really called for” and that it may “help a lot of folks be able to get their loans forgiven.”
In addition to discussing the recent changes to the PPP program, Denny also discussed the application and forgiveness process.
Businesses seeking PPP loans must do so through their bank, the Santa Clarita attorney explained. Denny said that banks are set to offer these loans directly to businesses, and businesses who take on PPP loans are set to apply for forgiveness through the bank by the end of the ten month PPP period.
Denny noted that the exact details of the forgiveness process have not yet been made available.
“I don’t know that anyone’s released any forms on how (the loan forgiveness process is) going to happen,” he said. “I think they think with ten months to go, they’ll probably come out with it eight months from now.”
Denny said that his office has been able to help many clients with the PPP application process, noting that “it’s been a bit of a side track from (Denny & Company’s) normal tax business, but thankfully the government had foresight … and extended the deadline so tax returns aren’t due until July 15th.”
Interested parties looking for more information on the PPP loan application process or who require assistance with their tax filings before the July 15 deadline can contact Denny & Company via their website or by calling (661) 286-8860.
The Santa Clarita CPA firm Denny & Company, LLP was established in 1984, and is a full-service firm of Certified Public Accountants in Santa Clarita, including Partners Matt Denny and Carolyn Denny. The Santa Clarita accountants work with small businesses and individuals, specializing in catering to each client’s unique needs and desires using a flexible approach. As a CPA in Santa Clarita, Matt Denny shares his knowledge and experience regularly on “Common Ground” on KHTS Radio. Those looking for the best CPA in Santa Clarita or a “CPA near me” can contact Denny & Company, LLP for more information today.
23929 Valencia Blvd. Suite 304
Valencia, CA 91355