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The CARES Act was a landmark, $2 trillion piece of legislation that not only provided every American with a $1,200 stimulus check and an extra $600 a week in unemployment benefits, but also put aside money for the Small Business Administration (SBA) to cover the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL). This program provides forgivable, low-interest loans to small businesses that qualify and has already been a lifesaver for many businesses that have been forced to shut their doors during the quarantine.But as with all good things, there will always be those who take advantage, which means that these loans come with strict standards and regulations for those applying to and receiving federal funds. Although most business owners would do anything to avoid an accusation of fraud, it can be tricky to navigate this complex area of finance and legislation. Mistakes can happen. To avoid any issues cropping up in the future, here are five strategies to keep your business safe from PPP loan blunders.1. Keep careful records regarding your PPP loan spendingDon’t wait until your business is large to keep meticulous records of your spending, especially when it comes to this type of loan. Because of the strict stipulations that come along with a PPP loan, it’s imperative that you keep careful records of how it is spent so you can prove your compliance with the letter of the law. Your business is no doubt suffering due to this economic downturn, so do not shoot yourself in the foot by being careless when it comes to record-keeping.Related: PPP Forgivable Loans Will be Unforgiving for Many2. Don’t use less than the minimum mandatory funds for payrollOne of the most important stipulations of forgiveness for SBA loans is that 75% of the funds must go towards payroll if the borrower is looking to get full forgiveness. Although you are allowed to include your own salary in this accounting, do not underestimate the time and effort it will take to re-hire the employees you had to let go during this time. Even if you cannot re-hire everyone, you are still required to use that same percentage of the loan towards payroll.3. Pay yourself a typical salaryAs we mentioned above, you are allowed to calculate the cost of your own salary into your PPP loan and pay yourself from these funds. If you are keeping careful records, there should be no issues producing evidence to support your calculations.Be careful to not overspend in this category, however. You can be sure that it will be found out somewhere down the road. If you are caught embezzling these funds, you will be subject to the heavy hand of the law, including felony charges and a hefty fine, so ensure your t’s are crossed and your i’s are dotted on every single document to avoid any issues along the line.4. Including 1099 workers Is unnecessaryIf your business often utilizes independent contractors, it is important to remember that their wages are not covered under your payroll for PPP loan funds. 1099 workers can apply for their own loans should they experience financial hardship, so there is no need to calculate extra funds to cover their expenses. Only employees who file W-2 forms each year with your company are eligible for these payroll funds.5. Do not use PPP funds for unrelated purchases It may be tempting to put a few more things on your company card during this tough time, but it’s not a good idea to use PPP funds towards non-business-related purchases, even if it’s an emergency. Careful record-keeping will expose small mistakes like this one, so be sure you keep your PPP funds separate from your personal expenses in order to avoid any nasty consequences down the road.Related: 8 Legal Requirements When You Start A BusinessThe consequences of PPP loan blundersIf you are accused of PPP loan issues, there is no need to panic just yet, especially if you’ve kept records and done everything by the book. But you should know what type of punishment you are looking at even if you inadvertently commit a crime related to your SBA loan. You may be subject to not just fines, but federal felony charges that come with prison time. Here is just a brief list of the issues you could run into after receiving a PPP loan, along with the consequences you may face.For dishonest statements made on federal applications, you could be subject to charges brought against businesses by the FBI and Inspector General. These will lead to arrest as well as felony charges. These include: FEMA fraud, SBA loans fraud, and PPP fraud. When it comes to unemployment benefits and unemployment insurance, any business caught defrauding these systems will be subject to arrest by the district attorney and prosecution by the AG or even the FBI. Another issue that you may run into is tax fraud, which can come about from lying or submitting dishonest information to the IRS in order to receive more funds. No one wants an issue with the IRS, and these charges can come with an arrest by the IRS Criminal Division. These also include payroll fraud, 1099 fraud, and W2 recipients fraud as well.Any business that is shown to be committed fraud related to the health crisis, whether it’s a dispute between partners and investors or employment fraud, will be subject to charges as well. Don’t use the pandemic to take advantage — it’s not in your best interest. Keeping your business safe Although the consequences to these types of criminal actions are extremely serious, a skilled criminal defense attorney should be able to clear your name if you come up against false charges of fraud. Remember: The more meticulous and exact your record-keeping has been, the better off you’ll be in a situation like this.Taking the strict regulations surrounding these loans seriously is not just a good idea — it’s essential if you’re looking to run a trusted and successful business whose legacy you can be proud of.Related: How to Stop a Frivolous Lawsuit From Sinking Your Business