AICPA, small business advocates call for clarity in PPP rules

By Ken Tysiac

The AICPA, the National Federation of Independent Business, the S Corporation Association, and four other small business advocacy organizations urged the U.S. Small Business Administration (SBA) on Tuesday to provide small businesses with clarity related to Paycheck Protection Program (PPP) funds.

The organizations, which together represent several million small businesses, issued a statement asking the SBA to immediately revise its recent guidance to better mirror the PPP’s intent. The statement also called for the SBA to issue additional guidance making clear the terms for PPP loan forgiveness.

According to the statement, uncertainty created by the SBA is causing businesses to return PPP money or forgo applying for PPP funds.

“The last thing we need is for deserving businesses to lay off employees and close their doors because ever-changing rules and the threat of civil penalties scared them away from the PPP,” the statement said.

The PPP was established to provide relief to small businesses during the coronavirus pandemic as part of the Coronavirus Aid, Relief, and Economic Security Act, P.L. 116-136, which was signed into law on March 27. PPP funds are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans, according to the SBA and Treasury.

After an initial round of $349 billion in PPP funding was exhausted after just 12 days, Congress approved an additional $370 billion in funding for small businesses, with $310 billion in fresh funds provided for the PPP. The application window for the second round of PPP funding opened April 27.

But demand for PPP funds has stalled as some small business leaders have grown concerned over whether they may face government penalties for how they use PPP funds. Seventy-five percent of PPP funds must be used to cover payroll costs for the loans to be forgiven.

The SBA warned April 23 that businesses with substantial access to liquidity may not qualify for PPP loans, and several larger companies returned their PPP funds. On April 28, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza announced that the SBA will review all PPP loans in excess of $2 million to make sure borrowers’ self-certification for the loans was appropriate.

“Changing SBA guidance is causing many small businesses to rethink their participation in the program,” the AICPA joint statement said. “Small businesses need consistency and certainty, and applicants need to know that they will be held to the same guidance that was in place at the time the business applied for a loan.”

The statement urged policymakers to remain focused on the PPP’s original purpose of ensuring that businesses have the financial resources to keep employees paid while government-mandated stay-at-home orders remain in place.

“Our nation’s economy will recover, but it will take time and it will take the hard work of small businesses that are critical to our communities,” the statement said.

Late last month, the AICPA requested that the SBA adopt a series of recommendations to be issued as guidance for small businesses in calculating loan forgiveness under the PPP.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

Ken Tysiac ( is the JofA’s editorial director.

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