PPP Forgiveness Update and Best Advice: It’s a Waiting Game

The federal government wrapped up the last round of the Paycheck Protection Program (PPP) on August 8th. This was the second wave of payroll protection money, with the first checks having gone out in April and May. The big questions now are if they were enough and if yet-another round of aid will be necessary.

Glenn Sandler, CEO of G.I. Tax Service in Melbourne, Florida, says, “The problem is nobody knows at this point. And in the meantime, businesses and families are struggling. It’s sad. Nobody knows where they stand.”

It’s true. There is a lot of indecision regarding the loans. But many people agree that the relief sent out so far will have been a wasted effort if more money is not provided. And Sandler adds, “Everyone is also waiting to hear about loan forgiveness, and it’s most likely going to happen for businesses who received less than two million. These people can’t pay this money back. It would be a waste of time for the government to pursue it.” Many people think he’s right. 

Many people are also frustrated with the unorganized PPP process. The Federal government hastily decided to push out round two of PPP loans without providing much information to the public. In the confusion, many self-employed folks missed out on receiving funds. Thinking they did not technically have a payroll, they didn’t apply.  But they did qualify, and this tragic, missed opportunity left well over a billion dollars of appropriated money untouched. Sandler says the money from this second wave should still be there, and he advocates getting it out to the people who desperately need it as soon as possible. 

Best Advice:

Businesses who received PPP loans in the first wave might think they need to be preparing the loan forgiveness forms to get ahead of the game. This approach might not be in their best interest. Right now, the best advice is to wait and see what happens—as hard as that might be. Here’s why:

1. The second round of paycheck protection checks just ended, and the deadline to start loan forgiveness paperwork is still a while away. 
2. The Small Business Administration has not updated the loan forgiveness forms to reflect the five-week extension of the program’s deadline. Starting and submitting the wrong form is a waste of time if other paperwork is needed later.
3. Legislative proposals are in the works to reduce the loan forgiveness paperwork process for loans under two million dollars.
4. The government has not decided if they are sending another round of relief checks. Doing so would further extend the deadline to complete the forgiveness forms.

Even though banks are sending out the loan forgiveness paperwork, you don’t have to complete the forms immediately. Sandler says, “The banks are trying to get ahead of the curve. Many were caught off guard at the onset of the program, and they now want to be ready when the federal government finally decides on payback plans and forgiveness.”

Sandler also says no one wants to be the first to get their information out there on these forms. He stresses that it’s a good rule of thumb in all situations to keep your personal and business information private until you have to divulge it, and Sandler adds that this is not the time. So, as hard as it might be, adopting a “wait and see” attitude is in the best interest of anyone who has received a PPP loan.

What bothers Sandler the most is how small businesses are struggling and barely holding on. The worst part is many are going through all of this, just to probably not make it in the end. At G.I. Tax, Sandler and his associates see their clients in agony over this day-to-day existence, with each new day taking its toll. Sandler adds, “What’s been done so far will all be in vain without more money. In the meantime, people sit and wait. The political ramifications of this whole thing are life-crushing. It’s like the government is playing ping-pong with peoples’ lives, and it’s not fair.”

And he’s right. No one anticipated the restrictions of COVID-19 to linger this far into the year. Had the country been able to open in April, as was first expected, the first round of PPP loans would have been that beacon in the storm many small businesses needed. However, as we head into the fourth quarter of 2020, there is still no end in sight for COVID-19 restrictions, and that beacon has been reduced to a very faint glimmer of hope.

Sandler says one way communities can save their small businesses is to patronize them more. Let’s face it: very few people outside of a community come to small businesses and shop regularly. It’s the people within the community that must provide the consistent support these businesses need. Sandler adds, “It’s about time local communities think about themselves and start a ‘buy local’ campaign if they don’t already have one.” A commitment to local businesses is the only way to save many of these small businesses that were probably already hurting before the pandemic. 

Sandler believes things have a way of turning around and foresees e-commerce moguls like Amazon losing some of their hold in the future. He believes that in the future, the times will dictate more of a community-based commerce, because people will wake up and see big businesses like Amazon don’t have their backs. But this time is way too far in the future to save people now. In the meantime, Sandler and his company continue to counsel their clients on how to navigate these rough waters. And his best advice at this point is to play the waiting game – as hard as it might be.