PPP forgiveness promises ‘a busy fall’ for accountants
Accountants and CPA who are helping their clients with the Paycheck Protection Program can expect a busy fall working on applying for forgiveness for the PPP loans those clients received, according to leading practitioners and industry experts.
Speaking during an American Institute of CPAs’ virtual Town Hall last week, Bill Pirolli, a partner at Rhode Island-based Regional Leader DiSanto Priest & Co., noted that his firm is currently tracking 220 different loans for its clients.
“So it’s going to be a busy fall as we manage all of those,” he said.
“Most of the forgiveness applications will be done in the fall, and some may even end up being done in 2021,” predicted Erik Asgeirsson, the president and CEO of CPA.com, the technology subsidiary of the institute.
PPP borrowers can apply for loan forgiveness any time they like, noted AICPA director of firm services Lisa Simpson, but if they don’t apply within 10 months after the end of the covered period, they have to start making payments of principal and interest
“No banks are even taking forgiveness applications until later in July,” said Asgeirsson.
When they do, they’ll presumably have plenty of applications to process: As of June 27, the PPP had disbursed 4.7 million loans to small businesses. The average loan was for $108,000, for a total of $519 billion lent in total — and there was still $134 billion in funding available for the program, with a new extended application deadline of Aug. 8.
Pirolli, who is also vice chairman of the AICPA, noted that there remain a number of questions that need to be answered before businesses begin applying for forgiveness.
“There is a lot of uncertainty right now, and it will continue,” agreed Asgeirsson, “but with time will come clarity. In the coming weeks, you’ll have more sophisticated forgiveness tools, and more complete guidance, and there will be a lot of certainty this fall for firms and their clients as to what will be forgiven.”
As with all things coronavirus-related, keeping clients informed on new developments surrounding the PPP will be critical. “One of our key efforts at the beginning was to communicate with our clients and keep them educated,” said Jeffrey Porter, founder and owner of Porter & Associates CPA. “After we get past July 15, then we’ll pivot to the forgiveness applications and getting all of our clients educated.”
As the government, lenders and others continue to define the forgiveness process, the AICPA is working with all the stakeholders to make it as easy as possible.
“We’re at a very critical stage,” Asgeirsson reported. “It feels somewhat like early April, where we were talking with government and payroll providers, only now it’s about the forgiveness process. Our goal is to come up with a uniform approach.”
“We are working on an online tool that helps you fill out the 3508 and 3508EZ form that integrates with a number of payroll companies to upload a payroll compliance form, and then allow you to input non-payroll data and source documents,” he added. “We think this could be used as a check and balance on what’s going on with the lender community — we know a lot of them will have their own tools, but we know some accounting firms and borrowers will want to make sure they’re getting the right amounts of forgiveness.”
The institute is also regularly updating its forgiveness calculator to account for new provisions.