Can my Coronavirus-related payments be garnished? (05/01/2020) A: Yes. Once funds are deposited into your account, they can be used to satisfy certain garnishment orders. For example, the payments may be subject to garnishment if you are behind on child support.
The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 subsequently authorized additional payments for qualifying individuals. Just as with PPP funds, nothing in the CARES Act currently allows any exemption from garnishment or set-off for the Economic Impact Payments.
If someone is found guilty of bank fraud, they can be fined up to $1 million or imprisoned for up to 30 years, or both. Documents for PPP loans are generally submitted to financial institutions, i.e. banks.
If you lie on your PPP loan application, you could be charged with a federal crime. This act is a criminal offense under section 1014, and if you're convicted can come with imprisonment of up to 30 years – or worse.
The most common reasons for all or part of a PPP loan to be unforgiven: You weren't eligible for a PPP loan. You made a mistake with your calculations. You didn't use the money for the proper purpose.
PPP Credit Checks
There does not appear to be any credit check required for PPP loans. That's somewhat surprising because these loans technically fall under the SBA 7(a) loan program, which typically does require acceptable credit.
Depending on the lender, you may or may not be given a reason for the denial. You are able to apply for the Paycheck Protection Program loan through other SBA lenders, but if you don't qualify (you run a franchise, or have more than 500 employees, for example), you may still be denied.
Your PPP loan may be audited to ensure funds were used for their intended purpose. All loans over $2 million will be fully audited, while spot checks will be performed on smaller loans.
It is illegal to make false statements to a financial institution, so if you were to lie on a PPP loan, you could be charged with this federal crime. This act is criminalized under section 1014 and if convicted, you can face quite a hefty fine along with imprisonment for up to 30 years.
First, the lender will seek payment from the business for the outstanding balance of the loan. However, if the business cannot pay the full amount, the lender will foreclose on the collateral pledged by the business. Your business assets may not have much value. In that case, the lender will abandon the collateral.
James Theodore Polzin, 48, of Gilbert, Arizona, pleaded guilty in October 2021. “This defendant defrauded a program intended to assist hardworking Americans who have been unfairly impacted as a result of this unprecedented and challenging health crisis,” said Scott Brown, special agent in charge for HSI Phoenix.
Depending on the size of the PPP loan, this can result in a $5,000,000 fine and up to 10 years in prison. 18 U.S.C. § 1343: Wire Fraud. This can result in fines and up to 20 years in prison.
Making false statements to obtain an SBA loan can result in serious criminal penalties. A person convicted for a federal crime relating to loan fraud faces federal prison time and steep fines.
SBA may order your employer to pay a portion of your disposable pay to satisfy delinquent non-tax debt owed to the United States through a process called administrative wage garnishment (AWG).
In January 2021, the IRS issued interim guidance instructing its employees not to levy on a bank account that contains PPP funds received within the prior 24 weeks. Some states have also taken the affirmative step to declare whether PPP funds are exempt from garnishment.
One way that the SBA can collect on your loan is through wage garnishment. Unlike with credit card companies, the government does not need to obtain a judgment against you before they can garnish your wages.
If your PPP loan is flagged – you should assume you are under investigation for PPP loan fraud. This is essentially the beginning of the PPP loan fraud investigation – and you should hire a PPP loan fraud attorney who can help you.
PPP loans in excess of $2 million are automatically triggered for an audit by the SBA. The SBA has created a safe harbor for any PPP loan borrower that, together with its affiliates, received loans of less than $2 million.
Yes, if your PPP loan is over $2 million. If your PPP loan is less than $2 million, you may be audited, but this is not certain.
Importantly, an SBA audit or investigation can take place after a PPP loan is forgiven, as the statute of limitations for an audit or investigation is generally six years. Nonprofits should retain all files and records related to a PPP loan and forgiveness application for at least this long.
Can a borrower be denied a PPP loan after being issued an SBA loan number? Yes. Once an SBA loan number is issued, the PPP loan must still go through the lender's final underwriting process.
Was ineligible for the PPP loan amount received or used the PPP loan proceeds for unauthorized uses. Is ineligible for PPP loan forgiveness in the amount determined by the lender in its full or partial approval decision issued to SBA.
Can I deposit my PPP/SBA loan into my individual or joint Checking account? We currently only offer personal and joint checking accounts. As such, we are not able to accept PPP loans for your business into your personal or joint checking accounts.
Not being able to spend your entire PPP loan may seem like a good problem to have, but it can lead to having loans that need to be repaid (with interest) and potential ineligibility for loan forgiveness.
“The SBA will pull (known as a hard pull) your credit prior to providing you with a loan to assess your credit report and score in order to determine your creditworthiness,” Woodley said. Your credit score gives a good indication of whether or not you'll pay your bills.