Many small businesses in the United States are considering applying for a Paycheck Protection Program (“PPP”) loan. The PPP loans have certain eligibility requirements and require the applicants to make certain certifications on the application. In order for a company to be certain that it is eligible, and that applying for a PPP loan is in the company’s best interest, we recommend that a company call a meeting of its board of directors to discuss the company’s plan to apply for a PPP loan. This ensures that the company and the board have given significant thought to the need and eligibility for a loan and the accuracy of the company’s application. Minutes of the meeting will serve as evidence of these deliberations, if the lender or government audits or questions the company in the future.
We explain the various topics that the board of directors should discuss before applying for a PPP loan in our latest COVID-19 Alert.