CARES Act: Paycheck Protection Program Documentation Checklist

FLB Law      Apr. 1, 2020

With the recent passage of the CARES Act, the expansion of SBA 7(a) (Paycheck Protection Program) loans has left many businesses wondering what they can do to take advantage this advantageous program.

While we are awaiting regulations and guidance on the implementation of the Program, we anticipate the following documents may be required when applying for these loans. We also provide guidance on the documentation we anticipate will be needed for the loan forgiveness portion of the Paycheck Protection Program.

Please note, in certain circumstances, FLB’s Corporate, Business and Banking Group attorneys can act as an Agent for Borrowers and assist businesses with the Paycheck Protection Program application at no cost to them.

Initial Application Requirements

 Entity Documentation

  • Articles of Incorporation/Certificate of Organization
  • Bylaws/Operating Agreement

Financial Documentation

  • Most recent business tax return (i.e., 2018 or 2019)
  • Year-to-date Profit & Loss Statement and Balance Sheet as of February 15, 2020

Employee/Payroll Documentation

  • Complete 2019 and first quarter 2020 IRS Quarterly 940, 941 or 944 payroll tax reports.
  • Complete 2019 and first quarter 2020 PA Form UC 2/2A unemployment tax reports.
  • Payroll Reports for the previous 12 months (i.e., beginning with your most recent payroll date and going backwards 12 months). Such reports must include the following for the time period specified above:
    • Gross wages for each employee, including officers receiving W-2 wages
    • Paid time off for each employee
    • Vacation pay for each employee
    • Family medical leave pay for each employee
    • State and local taxes assessed on the employee’s compensation for each employee
  • 1099’s for 2019 for independent contractors that would otherwise be an employee of your business (EXCLUDING 1099’s for services).
  • Documentation showing total of all health insurance premiums paid by the employer under a group health plan. Such documentation must list:
    • All employees and company owners
    • The premiums paid by the employer for the 12-month period immediately preceding the SBA loan origination date
  • Documentation of the sum of all retirement plan funding paid by the employer (excluding funding resulting from employee paycheck deferrals). Such documentation must include:
    • All employees and company owners
    • Information pertaining to 401(k) plans, Simple IRA, SEP IRAs

Anticipated Application for Forgiveness Documents

Upon requesting forgiveness under the program, we expect that the Borrower will be required to produce the documentation referenced above for the 8-week period following the loan origination date. Additionally, to establish that funds were used for a forgivable purpose under the program (other than payroll expenses), we anticipate that that Borrower will be required to produce copies of the following documents:

  • Lease agreements for real estate and tangible personal property and proof of their payment
  • Statements of interest paid on debt obligations (i.e., mortgage) indicating payment amounts, and proof of their payment
  • Evidence of utility payments such as cancelled checks or statements

We continue to monitor the ever-changing situation and will update these requirements as the regulations are released. If you would like assistance in assessing your eligibility or applying for a Paycheck Protection Program loan, the entire FLB team is here to help.  Please reach out to your attorney, use the form below, or give us a call at 610-797-9000. We wish you well during these extraordinary times.

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