The American Institute of CPAs (AICPA) is an advocate for additional relief for small businesses and has worked in recent months to prepare CPA firms for the next round of Paycheck Protection Program (PPP) funding through the development of essential tools and training.
With the recent enactment of emergency coronavirus relief, which includes renewed PPP funds and related assistance, new regulations will be in place early in the new year, according to the AICPA and its business and technology arm, CPA.com.
“CPA firms played a critical part in supporting small businesses over the past nine months and will continue to fill a crucial role in helping small businesses understand new PPP eligibility criteria, such as the 25% decline in gross receipts, so they can apply for this much-needed relief,” Erik Asgeirsson, president and CEO of CPA.com, said. “With the relief legislation now signed into law, lenders and the Small Business Administration will begin processing a new round of loan applications quickly. We’re in a much better place than we were when the original PPP was implemented. Firms have better experience, capabilities and new tools to deploy.”
The AICPA and CPA.com have been advising firms to reach out proactively to hard-pressed businesses and begin collecting key documents, including 2020 revenue and monthly payroll amounts. There are several new provisions in the $310 billion small business relief package that CPAs should take into account, including:_x000D_
- Expenses associated with forgiven PPP loans are now tax deductible and the definition of eligible expenses is broadened to include facility modifications and personal protection equipment, among other things.
- PPP loan recipients are eligible for a second draw of funding if they have 300 employees or fewer and can show a 25% decline in revenue in any 2020 quarter compared with the corresponding 2019 quarter
- There will be a simplified loan forgiveness process (although not automatic forgiveness) for businesses that received loans of $150,000 or below.
- There are some categories of newly eligible borrowers, such as 501(c)(6)s and news organizations, under certain conditions.
- Advances from an SBA Economic Injury Disaster Loan (EIDL) will not impact PPP loan forgiveness.
- Additional money has been authorized for PPP oversight, so even small loans could be subject to random review.
- Provisions of the Employee Retention Credit (ERC) have been modified to make this business relief option more widely available and more effective for small businesses
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The AICPA, CPA.com and Biz2Credit in September launched a financing platform for CPA firms, the CPA Business Funding Portal, to help practitioners as they assist small businesses through PPP loan forgiveness and any other small business financing options. The portal has been updated to pre-process the so-called PPP2 applications and also will incorporate the latest guidance.
“We’ll be ready to go almost immediately after the SBA issues its new forms and guidance,” Rohit Arora, CEO of Biz2Credit, said “We already have a way for CPA firms to start preparing PPP applications for their clients, and we will be ready to receive submissions as soon as the final rules are issued. The CPA portal offers an efficient, centralized platform for CPAs to manage relief funding for their small business clients, and we’ll continue to update and evolve it.”
Among other features, the CPA Business Lending Portal offers:
- A free service for small businesses or CPAs to use for PPP forgiveness and PPP2 applications
- A set of tools in a single platform to help CPA firms manage multiple clients in a standardized way
- Payment of applicable agent fees for firms registered for one of the commercial plans available through the platform
- Direct integration into the SBA E-Tran system to accelerate loan decisioning times and increase decision transparency for CPA firms’ small business clients
- Access to AICPA technical input and calculators
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“We’re encouraging firms to leverage platforms for PPP2 versus working on the many intricacies of the legislation for their own internal calculators,” Asgeirsson said. “Building these internal tools is not the best use of their time when there is so much for them to focus on in advising their clients.”
