May 8, 2020: How to Avoid Accidental Loan Fraud

Gusto Editors

May 8, 2020

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Would I lie to you, baby?

Alright, we all read the news about the Department of Justice going after businesses who may have fraudulently acquired PPP loans. Many a legit SMB may have since wondered, “Did I accidentally defraud the government?” 

The answer, in most cases, is no. The PPP loan was created to help small businesses who’ve been impacted by COVID-19. Unless you intentionally misled the authorities in your application or are a large business with ready access to other funds, you’re good. If you’re still worried, here’s our guide to avoid being seen as a federal fraudster.

Forgiven but not forgotten 

If your business managed to snag a PPP loan, you probably have a million questions about what to do next. Like, “How much of my staff do I actually need to rehire?” “What’s the optimal amount to pay them?” and  “How do I track my expenses?” (Hint for that last one: Open a separate bank account.)  

Here’s a comprehensive step-by-step guide on what to do once you’ve gotten a PPP loan. Pro tips: Print this guide out and mark your calendar with the day that your PPP loan period ends.

Finally, a word on work-share options 

ICYMI, work-sharing programs can be a helpful resource for businesses impacted by COVID-19. They allow employers to reduce the hours an employee works and use unemployment compensation to make up the difference in wages. It can be a great alternative to layoffs since it allows employers to retain a trained workforce while also maintaining their team’s economic stability. Many states have work-share programs, and are actively promoting them in light of COVID-19. Check out our database of work-share programs here. 

Our top relief options for the week:

  • Spanx The Red Backpack Fund
    • At least 1,000 grants of $5,000 each to female entrepreneurs in the U.S. to help support the long-term recovery of those impacted by the COVID-19 crisis.
    • Deadline: May 11, 2020
    • More Information
  • Amber Grant
    • The Amber Grant is a $4000 grant awarded to qualifying female entrepreneurs each month. At the end of the year, monthly grant recipients will have the opportunity to win an additional $2,500 grant. 
    • Deadline: May 31, 2020
    • More Information
  • Hello Alice
    • Hello Alice is offering $10,000 grants, distributed immediately to small business owners impacted by coronavirus. In addition to funding, grant recipients will receive ongoing support from the Hello Alice community.
    • More Information

On our radar

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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