Did your -non-profit organization receive a Paycheck Protection Program (PPP) loan? Are you wondering how to properly record it? The Small Business Administration (SBA) authorized forgivable loans to small businesses to pay their employees during COVID-19 as an incentive to keep employees employed during the pandemic. The SBA forgives loans if certain conditions are met (funds were spent on payroll, rent, and utilities).
Your non-profit has two options for recording a PPP loan:
Based on the above options, your organization must disclose the following information on its financial statements:
It is up to your Organization to decide whether to record your PPP loan as a conditional contribution or a loan. If you need assistance in requesting forgiveness, please give us a call and we can help! We have a Business Solutions Department that has assisted many organizations in requesting forgiveness.
For additional considerations, please reach out to T.J. Sheldon, Associate Director of the Assurance Team at Mahoney to be of help to you in any way.