As businesses who received Paycheck Protection Program loans or plan to capitalize on the program in the latest relief bill, Don Weinbren discussed the loan forgiveness process and future audits of PPP loans in a December 26, 2020 article from Tampa Bay Times.
Loan forgiveness for PPP loans, which is among the chief benefits of the program, is going to create logistical challenges for lenders and borrowers in the new year, especially as millions more new loans could potentially be processes at the same time. “A lot of people are bracing for what’s going to come in the next two months, which is an avalanche of forgiveness applications, and how fast can they get to them,” Weinbren said. “From a borrower standpoint, that’s going to be a big issue.”
Additionally, it remains to be seen what the government’s process for auditing PPP loans for compliance with its evolving guidance will entail. While less than 1 percent of PPP loans met the $2 million threshold to trigger an automatic audit, the companies that received far less might tend to struggle with record-keeping and have more to worry about, Weinbren said. “A lot of small business owners are not good record keepers in the best of times,” he said. “That could come back to haunt them.”
Limitations of government resources could create some reprieve for loan recipients worried about audits, but it’s best not to make assumptions given the public interest in the distribution of these federal funds. “The government’s manpower is so limited that I’m not sure how much auditing they’re truly going to be able to do, when you think about the number of loans that are out there,” Weinbren said. “On the other hand, The SBA has so much focus on it as a result of some of these unanswered questions that, unless the administration says something to them, I would expect they’re going to probably try to audit as many people as they can.”
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