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PPP Loans: Best Practices and Grave Mistakes to Avoid

An injection of extra funding from the Paycheck Protection Program (PPP) is an excellent way to boost your business’s situation. Still, it’s almost criminal to ignore the finest details when applying for and using this loan product.

An unfilled signature section can slow down your PPP loan request and delay access to funding. Poor record-keeping can also cause challenges when seeking loan leniency because you must account for every dollar spent to enjoy full forgiveness.

PPP Loan Tips & Grave Mistakes to Avoid

Below are some strategies to follow when seeking out a Paycheck Protection Program loan.

Dental PPP Loan Tips


  • Prepare credentials upfront


Proper preparation eliminates most obstacles faced during a PPP loan request. At the least, you must prepare payroll records and tax papers. Most lenders also expect you to submit other credentials like receipts, bank statements, canceled checks, purchase orders, etc. Prepare all documents up front for easy access at your provider’s request.


  • Consider using a different bank account for your PPP loan


Throwing your PPP lump sum into your business account reduces visibility into spending. With strict PPP forgiveness criteria, you want to keep every detail to simplify the audit process.


  • Apply with multiple lenders


Applying with multiple PPP loan providers increases your chances. Still, you want to withdraw all other requests as soon as one lender accepts your application. Be warned; two or more PPP loans are a recipe for disaster.


  • Establish a connection with your lender


Your lender is your best friend when it comes to securing PPP loans. It’s crucial to maintain healthy relationships with them throughout the loan period.

Grave PPP Loan Mistakes


  • Unfilled Signatures


Double-check your application documents before submitting anything for review. This will help you spot unfilled signatures that may be a stumbling block to your borrowing process.


  • Spending your PPP lump sum on unacceptable expenses


Purpose to spend all your PPP funding per the Small Business Administration’s rules. At least 60 percent should cover payroll e.g. wages, salaries, bonuses, commissions, etc.

Use the remaining 40 percent to cover other eligible expenses like operating costs, health & safety changes, and unexpected supplier expenses.

Acting against these rules limits access to full forgiveness; meaning you must pay back part of the loan amount.


  • Going in Solo


The PPP loan process is meticulous. You must prepare to qualify and then keep all records throughout the loan term if you’re after forgiveness.

You may need an accountant to help you keep all the records and monitor your PPP loan. Having an expert handle your books also allows you to focus on other vital business tasks. 

Final Words

An injection of extra funding from the Paycheck Protection Program (PPP) is an excellent way to boost your business’s situation. However, it’s crucial to follow the above best practices throughout the loan process.