AICPA calls on SBA to change 'unfair' PPP guidance, deadline

By Jeff Drew

The AICPA reiterated its recommendation that the U.S. Small Business Administration (SBA) delay the end of the Paycheck Protection Program (PPP) application period by at least 60 days and also urged the SBA to make retroactive new rules issued this week changing the formula sole proprietors use to calculate their maximum loan amounts.

In a statement released late Friday afternoon, the AICPA called “unfair” the decision by the SBA and Treasury that a new interim final rule released March 3 would apply only to loans made on or after that date. The IFR allows sole proprietors, independent contractors, and self-employed individuals who file Form 1040, Schedule C, Profit or Loss From Business, to calculate their maximum loan amount using gross income instead of net profit. The decision not to make the new guidance retroactive hurts Schedule C filers already approved for PPP loans, because maximum loan amounts calculated using gross income generally are significantly higher than those that use net profit.

“We have heard from many CPAs and small businesses that those who elected to apply for a PPP loan prior to the new guidance received a substantially smaller amount than those who submit an application today,” said Barry Melancon, CPA, CGMA, president and CEO of the AICPA, in the statement.

The AICPA also called for the March 31 deadline for PPP applications to be pushed back, in part because the changes mandated by the new IFR are significant enough that lenders won’t be able to implement them into their PPP portals for at least a week, Melancon said. That would leave lenders, sole proprietors, and the CPAs advising business owners only a couple of weeks to interpret the new guidance, gather documentation, and complete the application process, the AICPA said.

“The March 31 deadline simply does not make sense,” Melancon said.

The AICPA called on Congress earlier this week to extend the March 31 PPP deadline due to lagging guidance and delays with the SBA’s PPP processing system.

AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.

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.

Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

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.

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