The American Institute of CPAs (AICPA) and more than80 additional organizations have expressed concern about the new Paycheck Protection Program (PPP) “Loan Necessity Questionnaires.” The questionnaires (SBA Forms 3509 & 3510) were recently established by the Department of Treasury (Treasury) and the Small Business Administration (SBA) and require PPP borrowers with loans of $2 million or greater to complete a new form and provide extensive, burdensome documentation supporting their request for relief funds.
In letters to House Representatives Nancy Pelosi and Kevin McCarthy, Senators Mitch McConnell and Charles Schumer, Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza, the coalition, which represents millions of American workers and small businesses, suggests that existing PPP Forgiveness Applications – specifically, SBA Forms 3508, 3508EZ and 3508S – should continue to be used because they “…allow the agencies to examine, in greater detail and prior to the approval of loan forgiveness, relevant facts to ensure that the PPP loan funds were used in the way Congress intended.”
In their letter the organizations provide a common-sense solution, recommending that if the agencies need more information about the necessity or suitability of a PPP loan, they require the borrower to provide a narrative statement and any documentation the borrower believes is appropriate to demonstrate that the loan was critical to support its ongoing operations.
This proposal aligns with earlier AICPA recommendations for borrowers to maintain records of the factors that informed their decision to apply for the loan including the areas of uncertainty impacting operations. In a recent Journal of Accountancy article, Barry Melancon, CPA, CGMA, AICPA president and CEO said, “We previously recommended that [borrowers] keep contemporaneous records of what a business was dealing with, anticipating and deciding back at the time of the PPP loan.”
“We strongly believe that the vast majority of small businesses needed their PPP loan to stay in business and retain employees, and many still need additional financial support. These ongoing changes and new requirements could impact future business decisions on applying for additional relief,” said Erik Asgeirsson, president and CEO of CPA.com, an AICPA subsidiary that brings innovative technology solutions to the accounting profession. “AICPA’s goal since the beginning of the pandemic has been to support the implementation of the CARES Act and PPP. We have initiated several programs, including regular Town Hall meetings, our PPP Forgiveness Tool and a small business funding coalition to protect and stabilize our nation’s economy and help accounting professionals who are essential to business recovery.”
In the letter, AICPA and the other signatories identified policy and operational concerns including the following: