Cherryland
Management

PPP Forgiveness?

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PPP and Bankruptcy Thoughts
Here's an Important Observation from tax experts:

During recent Tax Update Seminar presenters discussed PPP loan forgiveness as it pertains to a business that is struggling to survive but, in reality, will not.

Both speakers shared stories of business clients who, without their guidance, had poured personal and retirement savings into a business only to see that business be forced to close doors permanently -- a worse case scenario for a business that leaves those owners scrambling to personally survive into their retirement years.

They fear this outcome will become worse as the owners seek loan forgiveness for any PPP money they have secured when, if they do move to bankruptcy, those loans should remain a loan to receive proper bankruptcy protection.
A reminder: if your businesses is properly behind a corporate veil of protection (should include LLCs, but check with your attorney), it is a SEPARATE entity that stands on its own. Owners should not use personal funds to prop up that business and should reach out for counsel on 1) an objective analysis of the business' viability, and 2) whether that business should be closed and how bankruptcy should be handled.

Bankruptcy is not necessarily the end of a business dream, but it can be a valuable way to protect personal wealth (especially retirement savings) and possibly leave the door open to starting a new business in the future.

 

 

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