The Department of Treasury has released the Paycheck Protection Program application and supplemental information, all available on their website.
The AICPA is providing a page on “SBA Paycheck Protection Program Resources for CPAs.”
Small businesses and sole proprietorships affected by the Coronavirus pandemic can apply for loans under the federal Paycheck Protection Program (PPP) beginning Friday, April 3. Independent contractors and self-employed individuals can apply starting Friday, April 10.
Be aware that the program’s lender guide lists accountants as approved agents of loan applicants and that agents can be compensated. “Agent fees will be paid out of lender fees. The lender will pay the agent. Agents may not collect any fees from the applicant.”
- Loans $350,000 and under: 1.00%
- Loans greater than $350,000-$2 million: 0.50%
- Loans greater than $2 million: 0.25%
SCACPA will provide additional guidance on best practices for being an agent as details become clear.
The $349 billion program was enacted as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, P.L. 116-136. Small businesses with 500 or fewer employees including not-for-profits, veterans’ organizations, tribal concerns, self-employed individuals, sole proprietorships and independent contractors are eligible for loans to pay up to eight weeks of payroll costs including benefits as well as other costs. Businesses with more than 500 employees are eligible in certain industries, Treasury said.
SCACPA and the AICPA strongly recommend that CPA firms immediately:
The Treasury urges those in need of funding to apply quickly, noting that the program has a cap and demand is likely to be high.
Funds from this program:
- Are available to businesses or 501(c)(3) nonprofits with fewer than 500 employees, including sole-proprietors, independent contractors and other self-employed individuals
- Can be used for:
- employee salaries under $100,000
- paid sick or medical leave
- insurance premiums
- mortgage, rent and utility payments
- Are 100% forgivable if used for the above purposes
While the application and documentation requirements are simple, make sure you review all the documents before advising any clients. Consider your clients’ intentions with other Small Business Administration loan programs when advising them on funding possibilities.
The Paycheck Protection Program is a win for Main Street, and responsive to the work we have been doing with the AICPA-led coalition seeking payroll relief for small businesses.
You can follow the AICPA YouTube account for additional details. We will continue to provide you with updates as we receive new information.
“Applications for small business Paycheck Protection Program open April 3” (Journal of Accountancy, March 31, 2020)