PPP and Nonprofits: How to Properly Use the Loan and Request for Forgiveness

PPP and Nonprofits: How to Properly Use the Loan and Request for Forgiveness

Original Broadcast

Monday, May 18, 2020

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Now that your nonprofit had been funded by the PPP, get up-to-date information and practical advice on properly using the loan funds as well as how best to use them in a manner in which you will able to request forgiveness of the loan.  While there is still much guidance coming from the SBA, we will be sure to clarify what is known, as well as those areas that remain unknown, using specific examples and practical next steps.  We will provide our most up-to-date professional insight as to what might be expected outcomes.


Aaron Fox, Director, Nonprofit Tax Group
Simone Putnam, Partner in Charge of the Human Resources Consulting Group


  • Can you certify your loan is necessary per FAQ #31?  Liquidity, reserves, endowments
  • Spend your loan properly to qualify as a loan
    • Proper uses including current definition of Payroll Costs, Rent and Utilities
    • Best places to spend it: overhead, programs not fully funded by grants, new and necessary programs, etc.
    • Government grant considerations
      • Direct costs
      • Indirect costs and the effect on NICRA
  • Spend your loan properly during the 8 week period to apply for loan forgiveness
    • Criteria you must meet (75% payroll)
    • Calculating the amount of forgiveness
      • Period for forgiveness
      • FTE comparison
      • Comparison of each individual employee’s pay
      • Expenses to be paid and accrued
      • Fixing FTE’s and wage reductions by June 30, 2020
      • Coordination with other parts of CARES
  • Accounting for the PPP funding
    • Basic entries
    • Expense categories and tagging for the PPP
    • Tracking for the loan and/or tracking for forgiveness
    • Documentation you may need to support both
  • 501(c)(3) with a related c-6 or c-4 entity
  • Questions yet to be clarified/answered by the SBA and others
  • Marcum resources

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