OBSERVATIONS FROM THE FINTECH SNARK TANK
In a recent Fintech Snark Tank post titled The Looming Paycheck Protection Program Nightmare, I wrote that PPP borrowers will face challenges regarding:
- Computing loan forgiveness. Loan forgiveness isn’t all or nothing. The amount of forgiveness can be reduced if a business doesn’t spend its loan exactly as specified by the guidelines. Don’t think there won’t be plenty of confusion—and lots of phone calls to the banks.
- Tracking allowable expenses. According to a survey of small business owners by Cornerstone Advisors and Autobooks, nearly half of small businesses rely on spreadsheets for their accounting efforts—10% have no technology support for their accounting operations.
- Filing taxes. Although forgiven PPP loans aren’t supposed to be considered as income, there are complications. The IRS denies deductions for “otherwise allowable expenses that are allocable to exempt income.” According to CPA Peter Reilly, “more than a few taxpayers will take the deduction anyway and the matter will end up in the courts unless Congress quickly clarifies this one way or the other.”
Mark Cuban and Jill Castilla, CEO of Citizens Bank of Edmond (OK), might not have read that article, but they got the message.
The Paycheck Protection Program Forgiveness Application Creator
In conjunction with Arkansas-based Teslar Software, Cuban and Castilla launched PPP.Bank, which, according to its website is a:
“Free, secure resource for small businesses, non-profits, and sole proprietors across the United States who received a Paycheck Protection Program (PPP) loan and are now applying for forgiveness.”
The website automates the 11-page forgiveness application and results in a PDF document that can be provided to the small business’ lender.
The site, which launched late afternoon on Friday, May 29, saw 14,000 site users generate 17,000 sessions and 52,000 page views by 12:00pm ET on June 1.
According to Joe Ehrhardt, CEO and founder of Teslar Software:
“By offering business owners an easy, automated method to calculate their forgiveness status, we can help bankers and everyone else involved in rescuing America’s small business owners.”
Mark Cuban’s Perspectives on Small Businesses and Financial Services
In an email exchange, I had a chance to ask Mark Cuban about his take on the small business situation.
What’s your outlook for small businesses over the next 6 to 12 months?
Cuban: “That’s a function of how quickly we can do national testing and get a vaccine. Until…
Read More: Mark Cuban On The Launch Of PPP.Bank