The US Small Business Administration and the Treasury Department want to know more about companies that have borrowed $ 2 million or more under the Paycheck Protection Program (PPP). So, in early November, they started sending lenders a new questionnaire to get more information about the operations and financial conditions of PPP borrowers during the pandemic.

But the questionnaire sparked controversy. More than 80 business groups, including AICPA, sent a letter to congressional leaders on Tuesday. He says the questionnaire “introduces a confusing and tedious process” for borrowers and lenders. The coalition also fears that it could “cause agencies to inappropriately challenge thousands of qualified PPP loans made to struggling small businesses.”

The new shape, Form 3509, asks for details of the borrower’s gross income, capital improvement projects, dividend payments and compensation, including whether any employees earn more than $ 250,000. The completed form must be returned to the lender within 10 business days of receipt by the borrower. Only companies that have borrowed $ 2 million or more are required to complete it.

“The nine-page questionnaire demands a level and type of reporting never required of borrowers by law or in any PPP lending process to date,” the coalition said in its letter.

The coalition is also concerned that the new form will ask for data on cash and income, which it says exposes the personal finances of small business owners. “The [Coronavirus Aid, Relief, and Economic Security] The law did not include a resource-based test, income reduction test, liquidity test or any other indicator to assess the financial situation in order to prioritize PPP loans to certain borrowers over to others, ”the letter says.

The Trump administration decided to review PPP relief loans after it was revealed that large companies like Shake Shack, Ruth’s Hospitality Group and MiMedx had secured PPP loans. The new form is designed to collect additional information that SBA loan examiners will use to assess bona fide certified borrowers on their PPP applications that economic uncertainty has made their loan application necessary.

The SBA says the reviews are aimed “at maximizing the integrity of the program and protecting taxpayer resources.”

In its letter, the business coalition recommends that instead of using the form, agencies require the borrower to provide a narrative statement and any documents the borrower deems appropriate to demonstrate that the loan was essential to support their ongoing operations.

The SBA says the reviews are aimed “at maximizing the integrity of the program and protecting taxpayer resources.”

The review of the PPP program comes at a time when many companies are asking for loan forgiveness on their PPP debt. Loan recipients are generally eligible for a discount if they have spent at least 60% of the loan proceeds on salary expenses.

The AICPA says loan forgiveness requests – SBA Forms 3508, 3508EZ, and 3508S – could also be used to “… allow agencies to examine, in more detail and before approval of loan cancellation, the relevant facts to ensure that PPP loan funds have been used as Congress l ‘planned.”

While there has been some confusion over the deadline for loan cancellation requests in late October, the SBA now says borrowers can submit a loan cancellation request anytime before the due date. loan maturity. This would be either two or five years from the origination of the loan, depending on the borrower’s agreement.

Accountants who serve small businesses are also grappling with the question of whether a PPP borrower can deduct loan-related expenses. The Internal Revenue Service said earlier in the year that although canceling a PPP loan would be tax-exempt, the expenses would not be deductible.

New IRS and Treasury guidelines say that if a business “reasonably believes” the loan will be canceled in the future, the costs associated with the loan are not deductible.

But members of Congress are pushing for a bipartisan bill, The Small Business Expense Protection Act 2020, which would allow the deductions.

said Erik Asgeirsson, President and CEO of, a subsidiary of AICPA: “We strongly believe that the vast majority of small businesses needed their PPP loan to stay in business and retain their employees, and many still need additional financial support. These ongoing changes and new requirements may impact future business decisions regarding the request for additional relief. “

(Photo by John Tlumacki / The Boston Globe via Getty Images)
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