WASHINGTON, D.C. (May 28, 2020) – The American Institute of CPAs (AICPA) today applauded the passage of H.B. 7010, the “Paycheck Protection Program Flexibility Act of 2002,” and stated that it is encouraged by bi-partisan support for flexibility in PPP loan guidelines. AICPA is pleased that the U.S. Senate has also demonstrated similar interest in supporting small businesses and looks forward to action on a final bi-partisan bill.
The AICPA thanks U.S. House of Representatives members Dean Phillips (D-MN) and Chip Roy (R-TX) for their leadership and support of small businesses who received PPP financial relief and now need more flexibility in its use. H.B. 7010 includes the following provisions:
Allows forgiveness for expenses beyond the 8-week covered period to 24 weeks and extends the rehiring deadline;
Increases the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
Extends the program from June 30 to December 31;
Extends loan terms from two to five years; and
Ensures full access to payroll tax deferment for businesses that take PPP loans.
“This bill significantly increases small businesses’ ability to have their PPP loan fully forgiven and will change forgiveness compliance,” said Erik Asgeirsson, CEO and president of CPA.com. “The current lack of flexibility in some PPP provisions has created unnecessary challenges. We welcome Congress’ attention to this important issue as it will allow more businesses to apply for and use PPP relief.”
Mark Koziel, CPA, AICPA executive vice president of firm services added, “We encourage CPA firms to discuss these pending changes with their clients and to closely monitor AICPA’s PPP Resource Center for updates and resources. CPA firm clients that are far along in the application process, using the current criteria, may be frustrated and these discussions can help inform their scenario planning.”
AICPA continues to be a vocal advocate for giving small businesses more flexibility and clarity on the use of PPP funds. Last week, it stated that recent PPP guidance leaves many unanswered questions and did not provide enough flexibility for PPP loan recipients. This makes it difficult for small business, and the CPA firms that advise, them to make critical decisions. AICPA created a loan forgiveness calculator to provide small businesses with a commonly accepted approach to PPP loan forgiveness. The AICPA’s loan calculator was made in consultation with an AICPA-led small business funding coalition whose members provide services and support to businesses that employ more than 75 million people.