If you took a Paycheck Protection Program (PPP) loan from the Small Business Administration (SBA), the answer is no. As these loans were administered by a lender, the onus is on the lender to determine if you spent the money correctly.
However, if you took an Economic Impact Disaster Loan (EIDL), the answer could be yes! If your business took an EIDL loan greater than $750,000, then chances are you are required to have your business audited.
Loans under the Economic Injury Disaster Loan (EIDL) program are considered federal financial assistance subject to single audit requirements. And funds received by an entity from a state/county/local government or agency, or even from another nonprofit, may be a passthrough of federal funds and included in calculating whether the threshold has been met.
More federal funding means an increased likelihood that the $750,000 could be crossed. It’s anticipated that many entities will require a single audit for the first time as a result of pandemic relief aid.
If your company took an EIDL loan and/or received federal funding of more than $750,000, check with us to see if you are now required to have a single audit done.
If you would like to discuss this topic, book a free 30 minutes consultation with our owner Matthew Shiebler, CPA. He’s been practicing accounting for over 25 years now and is a business owner, just like you!