Wait a minute. I very vaguely remember Nick Rekieta encouraging people to take out PPP loans and even
took one out for himself because it was 'free money.' Unfortunately, the stream where he talked about the loans is now privated so I can't go back and get the entire context. What are the chances of the loan he took biting him in the ass?
Very little unless he blatantly lied about his income to an astronomical tune. I talked to a cpa about it and ended up doing basically the same thing that I remember Rekieta/Beard describing. Obviously take Rekieta's financial advice with a shaker of salt but Beard's actual specialty is dealing with finance/contract law and it lined up with my cpa's advice
You also had to go through a bank to do it, it wasn't a direct loan from the government, instead it was a government backed loan through approved financial institutions. The bank gave out the loan, the government made the loan payments on your (business's) behalf as long as you followed certain rules with the funds
It's been several years at this point but since I went through it I can try and remember what the process was if anyone has specific questions. It was relatively simple so I'll try and lay out the steps real quick
As a sole proprietor of a business it was basically:
Calculate my business's income/payroll
Provide proof of income/payroll to my bank (I think I just used my tax info from previous year. As an SP basically all income counted as payroll)
Set up a business checking account to receive funds (not sure if this was 100% necessary or if I could have used an existing account but I didn't want to comingle funds and accidentally screw things up regardless)
PPP Loan was X% of payroll, I think 20%/2.5 months
Use funds for payroll purposes within four months
Fed makes loan payments on business's behalf
Upon payroll being disbursed government forgives the debt, if payroll wasn't properly disbursed (if you bought a car or just let it sit in the checking account for instance) you were responsible for repaying the feds.
If the loan was below a certain threshold they basically didn't pay attention to disbursements though. That threshold wasn't super high, like $10k I think, but you still needed proof of income/payroll to qualify in the first place, which is where the fraud is going to come from
