“PPP 2” Legislation Is Critical for Struggling Small Businesses
The American Institute of CPAs (AICPA) has renewed its call for swift passage of legislation to extend and expand the Paycheck Protection Program (PPP), which provides critical relief for small businesses impacted by the COVID-19 pandemic.
While the PPP proved to be an effective bridge for many companies affected by workplace restrictions due to the pandemic, more resources are urgently needed to help Main Street businesses that continue to struggle. Recent media articles document the impact of these woes:
- Yahoo! News reported that revenues of small businesses dropped 52% and payrolls declined 54%, according to Biz2Credit’s analysis of COVID-19 effects on small business owners.
- CNBC, citing data from Yelp, reported a 34% increase in business closures since mid-July and that 60% of the closures due to coronavirus are now permanent.
- Politico, quoting Drexel University statistics, reported that small businesses with 50 employees or less lost nearly 18 million jobs in the pandemic, with close to half of those jobs returning as states reopened – yet the recovery unmistakably tailed off in mid-June.
“From the beginning, we have advocated for the support of small businesses, their survival and their ability to employ people,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “It’s apparent that to increase the odds of many small businesses getting through this crisis, more governmental support is essential.”
The outlook is less than rosy for some industries. Colder temperatures are expected to exacerbate challenges for restaurants, bars and hospitality businesses, many of which will continue to face restrictions on indoor seating. For example, with Broadway shut down, sports events closed to spectators, and events like the Thanksgiving Parade canceled in New York, the tourism industry is suffering at the country’s top tourism destination and in other popular destinations across the U.S.
Meanwhile, billions of dollars from the initial PPP initiative that could help businesses survive went unused. Funds intended for small business finance should not be locked up in limbo.
“Money still remains unspent from the last PPP authorization, but businesses can’t currently tap those funds,” said Erik Asgeirsson, president and CEO of CPA.com, AICPA’s business and technology arm. “We need to allow new loan applications and add additional resources to help small businesses during this critical time. We support efforts to enact PPP 2.”
Asgeirsson made his remarks at the AICPA Town Hall, a weekly virtual update that focuses on the PPP and related topics and draws an audience of as many as 5,000 CPAs. AICPA, which represents more than 431,000 members in the U.S. and worldwide, issued six recommendations for pandemic relief-related legislation in July:
1. Allow full deductions for PPP-related business expenses.
2. Provide information and tools to further simplify the PPP Loan Forgiveness application process.
3. Remove unnecessary and unfair tax obstacles to remote work.
4. Allow Section 501(c)(6) associations and organizations access to PPP.
5. Provide additional Federal relief to state and local governments.
6. Adopt new coronavirus-related liability provisions.
CPAs have played a key role in assisting small businesses with PPP applications and the program’s loan forgiveness process. The AICPA has supported efforts to streamline and simplify the PPP process through recommendations from a small business funding coalition it leads. The AICPA, CPA.com and Biz2Credit have also created a free tool for borrowers and CPAs that helps automate the loan forgiveness process, PPPForgivenessTool.com.
Additionally, The Consumer Bankers Association (CBA) and more than 100 other trade associations have sent a letter to leaders in the U.S. Senate and House of Representatives asking them to support streamlining the forgiveness of PPP loans of $150,000 or less.
“Expediting the loan forgiveness process for many of these hard-hit businesses would save more than $7 billion and hours of paperwork,” the groups wrote.
Among the trade groups that signed the letter were the American Bankers Association, the American Hotel & Lodging Association, the Bank Policy Institute, the Consumer Bankers Association, the Credit Union National Association (CUNA), the National Restaurant Association, the U.S. Chamber of Commerce, and the Wine & Spirits Wholesalers of America.