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What if I Made Innocent Errors on My PPP Paperwork?
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What if I Made Innocent Errors on My PPP Paperwork?
The Paycheck Protection Program (PPP) provided a lifeline to millions of small businesses during the COVID-19 pandemic. However, the rules and requirements surrounding PPP loans were complex and frequently changing. As a result, many business owners likely made innocent mistakes or errors when applying for these emergency loans or completing the required paperwork.
If you discover an error in your PPP paperwork, don’t panic. Here’s what you need to know and do next:
Common Sources of Errors
Some of the most common innocent errors made with PPP paperwork include:
- Incorrect calculation of payroll costs used to determine loan amount
- Errors or typos in names, addresses, or identification numbers
- Incorrect industry classification code selected
- Supporting documentation does not match application information
- Forgotten signatures or initials on forms
- Mistakes in forgiveness documentation such as eligible expenses or number of retained employees
Many business owners found the PPP application and paperwork confusing. Forms changed multiple times, and calculations like payroll costs were complex. Even tax and legal professionals have admitted to making accidental mistakes with these emergency COVID loans.
Should I Report Errors or Discrepancies?
If you discover an innocent error that substantially impacts your PPP loan or forgiveness amount, it’s best to proactively address it. Significant mistakes could be flagged in an SBA audit and require repayment if not corrected.
For minor errors like typos, you may opt to leave those as is. But use your best judgment based on the type of error and the potential impact.
Contact Your Lender
To report errors or discrepancies on your PPP paperwork, the first step is contacting your lender. Your lender is responsible for assisting with the resolution of many issues related to your loan’s initial application or forgiveness documentation.
To correct errors, you will likely need to submit revised or additional documentation. The lender will advise if they can resolve the issues directly or if escalation to the SBA is required.
Escalate to the SBA
For more complex PPP loan issues that your lender cannot resolve directly, they will need to escalate your case to the Small Business Administration. This is required in situations like:
- Loan increases or decreases of more than $2 million
- Loans flagged for potential fraud or misuse of funds
- Errors requiring loan cancellation and reissuance
Be prepared for extended timelines working directly with the SBA. Their systems and staff have been overwhelmed by PPP loan volumes.
Top Errors to Avoid
While any mistake on your PPP paperwork could cause issues, there are a few key errors to be particularly mindful of:
1. Inaccurate Loan Amounts
Errors calculating payroll costs used to determine your PPP loan amount are very common. But substantial inaccuracies could require you to repay excess loan funds if not corrected.
Double check your monthly payroll calculations against your supporting tax documentation before submitting. And confirm no annual employee salaries above $100,000 were included.
2. Mismatched Supporting Documents
When applying for PPP loan forgiveness, all documentation you provide must match the details listed on your application and other paperwork. Any discrepancies or inconsistencies could delay or invalidate your loan forgiveness.
Verify employee headcounts, wages paid, mortgage interest amounts, rent, utilities, and other forgiveness expenses listed match supporting documents like payroll reports, bank statements, and tax filings.
Only using your PPP funds for eligible expenses is critical for forgiveness. Any unauthorized expenses could require you to repay that portion of the loan.
Review the detailed list of authorized uses and confirm you have sufficient documentation to validate those expenditures if reviewed.
When to Hire Assistance
Working through issues directly with your lender or the SBA can be challenging. If you have limited time, trouble getting clear guidance, or anxiety dealing with bureaucracy, seeking professional assistance can be wise.
Accountants, tax professionals, business lawyers, and dedicated PPP loan consultants can all provide help disputing errors, submitting revised documentation, or communicating with lenders and the SBA on your behalf.
Their expertise and experience can also prove invaluable if errors trigger an audit or forgiveness review. Though fees apply, for many the cost is worthwhile to resolve PPP issues and avoid repayment obligations.
Don’t Panic and Don’t Delay
Discovering you made innocent mistakes on PPP paperwork can induce panic. But try to remain calm and take prompt action.
Minor errors may resolve themselves without intervention. But significant inaccuracies must be addressed quickly to avoid problems.
You have limited timeframes to correct loan amounts, apply for forgiveness, appeal denied applications, and address flagged issues. Letting problems linger heightens your risks of audits, denials, and repayment obligations.
Be proactive, seek assistance if you need it, provide compliant documentation, and ensure innocent errors don’t mushroom into major headaches down the road.
With some care and attention, you can remedy most innocent PPP paperwork mistakes without significant consequences. Just don’t let fear cause you to ignore issues until it’s too late. Address errors promptly and move forward with confidence.
Resources
For further guidance on resolving PPP paperwork errors, check out these handy resources:
- SBA PPP Website
- Reddit Master List of PPP Forgiveness Errors
- Avvo – Common PPP Errors & Fixes
- Lawinfo – PPP Loan Forgiveness
Don’t let small PPP paperwork mistakes turn into major headaches. Be proactive, seek help if needed, and get errors remedied promptly. With some care and attention, you can resolve innocent issues smoothly and avoid repayment obligations or other consequences.