The Bukh Law Firm offers the following tips on keeping good PPP records
1. Keep detailed records regarding all PPP loan spending.
Because of the strict stipulations that come along with a PPP loan, it is imperative businesses keep careful records of how the money is spent to prove compliance with the letter of the law.
2. Do not use less than the minimum mandatory funds for payroll, which is 75%. If a business does not do this, it will have to pay the money back to the lender. Even if it is impossible to hire back everyone who may have been laid off, a business must still meet the 75% percentage toward payroll.
3. Pay yourself a typical salary
Business owners can calculate the cost of their own salary into the PPP loan requirement. Keeping careful records should mean there will be no issues producing evidence to support how loan funds were calculated.
4. 1099 worker salaries cannot be used.
Even If a business regularly uses independent contractors, remember that their wages are not covered under the payroll for PPP loan funds. 1099 workers can apply for their own loans if they experience financial hardship. Only employees who file W-2 forms each year with a company are eligible for these payroll funds.
5. Do not use PPP funds for non-business purchases.
While it may be tempting, it is not a good idea to use PPP funds towards non-business-related purchases, even in an emergency. Keep PPP funds separate from your personal expenses to avoid legal consequences down the road.
