SBA Loan Audits
Businesses that have received loans under the Paycheck Protection Plan (PPP) or the Economic Injury Disaster Loan (EIDL) must be aware of the possibility of a potential audit by the United States Small Business Administration’s (SBA) Office. While the SBA plans on automatically auditing every PPP loan that is over 2 million dollars, smaller loans may be audited as well.
Borrowers may be audited on matters such as eligibility, loan amount, how the funds were used and whether they should have been forgiven. Based on the results of the audit, some borrowers might be required to repay their PPP loans and worse, depending on the severity of the findings, may face civil and criminal prosecution.
At the Law Offices of Paul D. Petruzzi, P.A., our team can help you prepare for an audit. The following documents will most likely be requested for a PPP loan audit: financial statements; income and employment tax returns; payroll records for all pay periods within the applicable covered period; calculation of full-time equivalent employees; and bank and other records related to how the funds were used (for example, canceled checks, utility bills, leases and mortgage statements).
Instances that would prompt a criminal investigation and/or prosecution would be situations where fraudulent documentation was provided to the SBA or in situations where false statements were made on a federal application. Any business owner lying about needing assistance in any form is committing loan fraud.
Contact us today if an SBA loan officer or attorney is requesting to audit your business or requesting documentation from you.