The “intense” cycle of PPP loan applications starts in 2021 for CPAs

Greg White spent the generally slow week between Christmas and New Years preparing for what could be a January storm: up to 500 clients who may need help from his small Seattle accounting firm to submit reports. requests for another round of federal relief loans.

White is hoping, however, that this round of nominations goes more smoothly than it did last spring, when sorted accountants navigating panicked business owners through a massive government program that had few rules and unprepared lenders. Congress injected $ 284 billion more into the Paycheck Protection Program in a bill enacted the law on Dec. 27 and added some new twists to the second phase of the loan program meant to help small businesses closed and still struggling with the pandemic.

“People are going to be very anxious to get their hands on this money as fast as they can,” said White, shareholder and founder of WGN PS. “It was a gold rush the last time around. It was a dog fight to get that money.

Almost half of small businesses would apply for a second PPP loan if they are eligible, and 22% of borrowers have or expect to have to lay off staff in the next six months, according to a December survey nearly 600 members of the National Federation of Independent Business.

Many of White’s clients are in the commercial fishing industry, ranging from large industrial operations to small “mom and pop” businesses. Those who supply netting used in grocery store staples have done well this year, but those who deliver fresh catches to restaurants have struggled alongside their restaurant customers.

White sent an email last week urging clients to start preparing even while waiting for updated application forms and advice on how to apply under the amended Small Business Administration and Treasury Department requirements. . Only a few responded initially, but White has said he expects it to pick up again soon.

the law provides additional loan relief to restaurants, allows businesses to deduce of their tax expenditures they paid with the loans, caps the size of businesses that could apply for relief, and simplifies the loan forgiveness process, among other measures.

The application form and guidance could be available as early as this week, and loan applications could start rolling out the second week of January with the so-called PPP2 going live, said Erik Asgeirsson, president and CEO of CPA.com.

A quick start

Companies should prepare for “a busy time” and start talking to their customers, updating engagement agreements and uploading as much information and documentation as possible, Asgeirsson suggested.

“It will be a quick start to the year,” said Asgeirsson, the American Institute of CPA’s contact person for the loan program response.

Also according to Asgeirsson, this wave of applications should be easier this time. The updated program builds on the existing PPP framework and payroll processors have reports ready for business to use.

He encouraged companies to take advantage of existing software and resources to calculate payroll and other information needed to submit loan applications. Among these options: the AICPA’s own cloud-based tool, which has been updated to reflect the new law, rather than creating new tools and calculators in-house.

A not-so-calm vacation

For some CPA firms, the January rush started early.

Phone calls and emails retrieved during what was normally a week off for Sensiba San Filippo LLP CPAs. Clients wanted to know if they were eligible for the updated PPP loans – a look into the busy month ahead, said Frank Balestreri, the firm’s partner in charge of its consulting practice, overseeing its PPP work.

Balestreri was supposed to be on vacation. Instead, he spent the vacation week updating his company’s web portal and chatting with bankers about who would accept applications and when.

“It’s first come, first served. And when the money runs out, it’s like musical chairs. You don’t want to be the last man standing, ”he said.

The San Francisco-based company serves clients in the hospitality, construction, and service industries, including a domestic shutters vendor reeling from intermittent shutdown orders and a restaurant supplier who typically works with customers. corporate kitchens that power Silicon Valley’s tech armies. workers.

Balestreri said he was waiting to post a webinar until he got advice on some key concepts of the updated loan program, including a new limitation that an applicant’s gross receipts must have declined. at least 25% compared to the previous year. These details will be important to businesses that might be close to that threshold, and the method of accounting they use to run their business might also come into play.

Without these additional details, PPP2 could be exposed to the same confusion that frustrated the initial deployment of the program.

“We have this 5,000 page document out there but someone has yet to translate it,” Balestreri said. “We need to see a loan application. We need to understand exactly how this concept of gross revenue will be interpreted.

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