PPP Loan Forgiveness Applications: SBA Document Requests

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The Association has heard from several dealers that have submitted PPP loan forgiveness applications - using the FTE Reduction Safe Harbor 1 exemption - that their applications have sailed through their bank’s review but have stalled under Small Business Administration (SBA) examination. 

The SBA is asking for documentation establishing that the dealership was unable to return to the same level of “business activity” between February 15, 2020, and the end of their covered period (the date of the PPP loan plus 24 weeks) due to compliance with government orders issued between March 1, 2020 and December 31, 2020.

Earlier in the year, the Association put together a timeline of relevant government orders designed to assist dealers with preparing their Safe Harbor 1 loan forgiveness applications.

Dealers should provide copies of all relevant orders (provided below) and are also advised to consider providing a memo that summarizes these orders, discusses the impact these orders had on their dealership and provide financial evidence of the impact, usually in the form of year-over-year changes in revenue and/or profit.  The SBA guidance specifically mentions that documentation must include copies of the applicable requirements and relevant financial records. 

GNYADA reiterates its recommendation that dealers consult their dealership accountant or attorney for the preparation of their PPP loan forgiveness application and the use of the Safe Harbor 1 exemption based on their individual dealership’s unique facts and circumstances.

GNYADA thanks Edward McWilliams, CPA, Partner at Cerini & Associates, LLP (emcwilliams@cerinicpa.com) for his contributions to this article.

RELEVANT ORDERS
EO 202
EO 202.6
EO 202.7
EO 202.8
EO 202.11
EO 202.13
EO 202.14
EO 202.16
EO 202.17
EO 202.18
EO 202.31
EO 202.35
EO 202.41
EO 202.45
MAY 29, 2020 DOH INTERIM GUIDANCE
JUNE 15, 2020 DOH INTERIM GUIDANCE
JUNE 26, 2020 DOH INTERIM GUIDANCE
JULY 1, 2020 DOH INTERIM GUIDANCE
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