As a construction contractor, if you received a Paycheck Protection Program loan over $2 million, you are going to be required to complete a form that verifies your need for the funding. This additional step was added by the Small Business Association to examine the operations and finances of construction companies during the pandemic, and the PPP necessity form includes questions about your gross revenues, capital improvement projects, compensation and more.
What Is the PPP Necessity Form?
The SBA and Treasury Department are each using a PPP necessity form for companies that receive $2 million or more through the program. The questionnaires must be completed by each borrower, and they include a variety of pieces of information you must submit, including gross revenue, any mandated shutdowns that impacted operations, employee compensation and liquidity.
Why Is the Information Being Collected?
The SBA plans on using the PPP necessity form to determine if contractors and other businesses were borrowing money in good faith and that there was economic uncertainty that led to the loan request. The additional form (and potential future forms) are the SBA’s attempt at making sure deserving businesses received funding.
What Should I Do If I Receive a PPP Necessity Form?
These forms need to be returned within five business days of receipt, so you must act quickly to compile all necessary information. It’s a good idea to review your form with your tax preparation professionals and business consultants at MKS&H before submission to ensure everything is as accurate as possible.
Does the PPP Necessity Form Impact Loan Forgiveness?
Yes! Any contractor who borrowed $2 million or more must complete the PPP necessity form regardless of whether or not they are applying for forgiveness. If you are going to seek forgiveness, you will be asked for proof that the PPP necessity form was filed in a timely fashion with the Small Business Administration. MKS&H can help you to complete your form and prepare for any additional paperwork that the SBA might issue relating to the PPP program.
Prepare for Your Taxes and Meet the PPP Requirements with Help from MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry. We can work with you to explore the many tax benefits of investment properties and assess your real estate portfolio. Contact us today for a consultation.