AICPA urges release of PPP loan forgiveness guidance

By Jeff Drew

The AICPA issued a news release Friday urging the Treasury Department and the U.S. Small Business Administration (SBA) to release key guidance on Paycheck Protection Program (PPP) loan forgiveness calculations.

“The nation’s 44,000 CPA firms have quickly mobilized to get PPP funds into the hands of small businesses,” the release says. “However, they and their clients say that the lack of guidance makes it difficult for them to make critical decisions on important matters, such as staff retention.”

Congress created the PPP as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities. PPP borrowers can qualify to have the loans forgiven if the proceeds are used to pay certain eligible costs. However, the amount of loan forgiveness will be reduced if less than 75% of the funds are spent on payroll over an eight-week loan forgiveness period.

PPP recipients, and the CPAs who advise them, have been waiting for guidance on specific documents and calculations to use in determining their loan forgiveness amount under the PPP.

“While Treasury and the SBA have repeatedly said that more guidance is forthcoming, the guidance release dates remain uncertain,” AICPA President and CEO Barry Melancon, CPA, CGMA, said in the news release. “We continue to call for a consistent and efficient approach to loan forgiveness that aligns with borrower operations and the intent of the PPP. Without guidance from Treasury and the SBA, small business and nonprofit PPP borrowers face real timing and calculation implications for the forgiveness component of the loans.”

There are numerous areas where additional guidance is needed, and the AICPA has made several recommendations. Earlier this week, the AICPA issued a series of loan forgiveness recommendations to the SBA that build on previous recommendations the AICPA has provided to help bring clarity to the implementation of the PPP, particularly in the areas where uniform reporting methodology from payroll providers will support a consistent and efficient approach to key calculations.

The PPP so far

Congress established the PPP through the CARES Act, which was signed into law on March 27. The program is 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.

SBA lenders were flooded with PPP applications from businesses in need of resources to help their businesses as the coronavirus pandemic and the consequences from social-distancing requirements devastated the economy. By April 16, the SBA had stopped accepting applications for the PPP after exhausting the initial $349 billion in funding. Last week, Congress approved an additional $370 billion in funding for small businesses, with $310 billion in fresh funds provided to the PPP. The application window for the second round of PPP funding opened April 27. 

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.

Jeff Drew ( is a JofA senior editor.

Where to find June’s flipbook issue

The Journal of Accountancy is now completely digital. 





Leases standard: Tackling implementation — and beyond

The new accounting standard provides greater transparency but requires wide-ranging data gathering. Learn more by downloading this comprehensive report.