Small businesses should focus on PPP’s intent, keep using funds
Resources
AICPA logo
Cart
searchSearch
search
burger
AICPA logo
  • Home
purple and blue plexus background
Resources

Small businesses should focus on PPP’s intent, keep using funds

2 years ago · 2 min read · AICPA Insights Blog

When the Department of the Treasury and Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) many businesses saw an opportunity to stay open and their employees paid during this very difficult time.

There is no question that small businesses are the heart of our nation’s economy, and without them our road to recovery will be longer and significantly more difficult. I am inspired every day by the stories I hear about our profession’s tireless efforts to support small businesses everywhere. The AICPA is committed to our economic recovery, and I would like to provide some perspective to advance the understanding of the PPP.

The speed at which so many small businesses accessed PPP funds reflects a commitment to staying open, keeping employees paid and serving their community. Yes, there have been bumps in the road. Challenges are expected for a program of this magnitude and the speed at which it was made available. Since the launch of the PPP in April, the SBA has processed nearly four million loans, totaling more than half a trillion dollars. An extraordinary feat.

Unfortunately, the pendulum has shifted from can-do optimism to, for some, moral outrage. Now, millions of small businesses feel pressured to return money they received or question whether they should apply for PPP funds.

Business that see PPP funds as important to keeping employees and remaining viable should not be concerned about keeping or applying for PPP funds.

As many CPA firm leaders know, small businesses are far from out of the woods. Even in a normal economic environment, they have very few options when they need cash to maintain operations. To stay afloat, the smallest often rely on credit cards or bank loans, which require some form of collateral and a repayment plan. We are in unprecedented and uncharted times, and the journey ahead will have many challenges, most of which cannot be fully seen today.

This impacts all businesses. We need to be careful to not create additional hurdles — either logistical or moral — that could make small businesses choose bankruptcy and layoffs instead of keeping or applying for PPP funds.

Policymakers, Congress, business leaders and the media should remain focused on the intent of the PPP, which is to keep small businesses open and employees paid. This is critical to ensuring that our economy quickly recovers.

The PPP was written to make financial relief quickly available to as many small businesses as possible, without requiring them to jump through hoops or make complicated calculations. The application requires a good faith certification that the future of the business is economically uncertain.

Few businesses owners knew in April the depth and breadth of the economic distress they would incur. The vast majority of small businesses who have applied for a PPP loan greatly needed the relief and have made an appropriate assessment of how they have been impacted. In today’s economy, it is nearly impossible to find a company whose financial situation has not been negatively impacted to some degree.

The last thing our economy needs is small businesses laying off employees and closing shop for good because they chose to return PPP funds or not apply at all.

The Paycheck Protection Program remains available and small businesses should continue to apply for relief. Our nation’s economy will recover, and the importance of America’s small businesses has never been greater.

Barry Melancon, CPA, CGMA

Barry C. Melancon is the CEO of the Association of International Certified Professional Accountants, the most influential body of professional accountants in the world with 650,000 members and students. Formed in 2017, it combines the strengths of The Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA), which Melancon also leads as President & CEO.

Melancon joined the AICPA in 1995 when he was 37 years old, and is now the longest serving CEO in the organization’s 129 year history. Under his tenure, the AICPA has grown to become the largest membership body of CPAs in the world and has spearheaded a number of initiatives to benefit not only the profession, but also investors, business owners, lenders and the general public. These include audit quality centers; private company reporting standards; eXtensible Business Reporting Language (XBRL); the computerized CPA exam; and two consumer financial literacy education programs.

Under Melancon’s leadership in 2011, the AICPA formed a joint venture with CIMA to elevate management accounting globally. They created the Chartered Global Management Accountant (CGMA) designation for those professionals who meet the highest benchmark of rigor and quality. Today, approximately 150,000 professionals hold the CGMA designation worldwide. Building on this success, AICPA and CIMA members in June 2016 voted to evolve the joint venture into the Association. Its mission is to drive a dynamic accounting profession around the world that powers trust, opportunity and prosperity. Melancon was named the Association’s first CEO.

Melancon is also Global Chairman of the Board of the International Integrated Reporting Council (IIRC), Chairman of XBRL-US, and a founding and current board member of both the Global Accounting Alliance (GAA) and the Center for Audit Quality (CAQ). He is a founding and current board member of the Government Transformation Initiative, serves on the board of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, and is a member of the delegation to the International Federation of Accountants (IFAC). During 2007-2008, Melancon served on the U.S. Department of the Treasury Advisory Committee on the Auditing Profession.

Melancon has testified for the profession before Congress numerous times, has been honored with many awards, including the 2011 National Association Executive of the Year.

Prior to joining the AICPA, Melancon served for eight years as Executive Director of the Society of Louisiana CPAs. He began his accounting career in 1979 at a small CPA firm in Louisiana. In 1984, he was elected a firm partner. Melancon graduated in 1978 from Nicholls State University in Louisiana, majoring in accounting with a minor in government. He also earned an MBA in 1983 from Nicholls State University and subsequently served as an adjunct professor of accounting at his alma mater for four years. He was also awarded his alma mater’s first and only Honorary Doctorate of Commerce in 2008.

What did you think of this?

Every bit of feedback you provide will help us improve your experience

What did you think of this?

Every bit of feedback you provide will help us improve your experience