Accountant shares small business loan approval tips

Coronavirus

GRAND RAPIDS, Mich. (WOOD) — We have a deal. The bill that includes new funding for small businesses was passed by the Senate Tuesday, meaning more Paycheck Protection Program loans could be given to business owners soon. 

If you missed out on the money the first time around, this could be a chance to save your business.

The House has been called to vote on the bill on Thursday.

News 8 spoke with a certified public accountant who is sharing some free tips for getting approved. 

“If you haven’t applied and you qualify, its definitely worth pursuing and applying,” said Culver CPA Group President Duane Culver.

Culver adds that there are tricks to increase your chances of walking away with the loan. 

“Getting the information together in time and knowing what information to get together (is important),” Culver said.

The key documents you need are a record of the payroll: who got paid and how much during a year. Some banks are asking specifically for the payroll from Feb. 15. You also need the 941 Form or the 940: a payroll tax form filed to the IRS.

Asking for the right amount of money is also important.

“The goal of the small business owner is to have a larger loan,” Culver said.

Culver says business owners should look at your payroll for the fiscal and the calendar year. 

“What we are evaluating is which one has a higher payroll cost,” Culver said.

The larger the payroll, the larger loan. The loan calculation given to CPAs is your yearly payroll divided by 12 months and then multiple by 2.5. That’s figure is the amount you should apply for. 

The last step is the bank application. Many banks have pulled the application until more money was approved. 

Culver’s advice for hearing back from the bank:

“I think it’s best if you have a contact at the bank … if it’s the branch manager or you have a loan officer,” Culver said.

Sadly, there is no magic trick to guaranteeing a loan. 

Hiring a CPA can increase your chances, but that can cost anywhere from a couple hundred to a few thousand dollars. 

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