You should put a PPP loan into a separate account to get it forgiven - Business Insider

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You should put your Paycheck Protection loan into a separate bank account if you want it to be forgiven, experts say

"The quote 'follow the money' comes to mind here, where being able to track and prove what was spent is extremely important for getting your loan forgiven," Nick Kolbenschlag, cofounder and managing partner of financial services firmin Charlotte, North Carolina, told Business Insider.

For example, when she uses her business credit card to pay the utilities, she goes into the PPP account and makes a payment to the business for the amount of that utility payment, and documents that as a reimbursement. "So I'm paying everything as normal, but as I'm paying covered things, I'm transferring that same amount out of the PPP account into the operating account and clearly documenting it. All of the money will stay in the PPP account until it's actually spent," she explained.

Valentine said this system is the combination of Kolbenschlag's advice and the simple necessity of being organized in the environment of a real-estate brokerage, which she compared to "herding cats." Regardless, she feels that separating and classifying the funds in this manner will help her be better prepared to ultimately request forgiveness.

"I own a real estate brokerage and I actively sell — I have lots of systems and practices in place and this is an easy way to keep track of everything," she said. "I couldn't even imagine applying for forgiveness otherwise."Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please emailfrom Business Insider Intelligence on how COVID-19 is affecting industries.

 

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