Yesterday, Congress passed a highly anticipated $900 billion coronavirus relief bill, the second of its kind this year. The bill is the result of months of negotiation, an exchange the American public and CPAs have been watching closely. Many of the expected provisions for the second iteration of the Paycheck Protection Program (PPP) were indeed present in the final bill, other long-standing quandaries regarding the first iteration of the program have also been addressed, including deductibility (check here for an overview of the latest provisions).
Last week, Erik Asgeirsson, CEO of CPA.com, suggested applications for the second round of Paycheck Protection Program (PPP) loans have the potential to open by the end of this year, depending on when the bill is signed into law. That said, CPAs and CPA firms need to be sitting on go for the moment those applications open in order to ensure their small business clients get the funds they need to stay afloat. Funds that have already come too late for more than 100,000 small businesses which closed permanently this year due to the pandemic, according to Vox1.
AICPA insights reports that CPA firms should view securing funds for small businesses as a new category of advisory services, one that is predicted to last through 2022 in terms of lingering pandemic impacts2. That said, advising small business clients about this new round of PPP loan applications, gathering the necessary documents and building relationships with fintech solutions to make that process easier is best started now. To do this, CPAs and firms should include the following strategies for meeting this crucial moment fully prepared.
Create a plan which includes partner buy-in so that applications are ready for processing from the word go. Ensuring that all red tape, consent and oversight requirements within your firm and business partnerships have been met prior to the moment applications go live is paramount to delivering your clients’ best chances for securing funds.
Dedicate an internal team to PPP applications, client communication and promotion. Ensure your team is aligned on procedure and task organization and ensure that any marketing strategies adhere with the structure of the service being rendered.
Prepare Engagement Letters that will inform your clients of the opportunity, and how you can help them determine their next steps, including application. Have a template for all subsequent communications prepped and ready so that you can easily keep clients informed of their status throughout.
Fill out applications in advance to ensure they are ready for immediate submission. Don’t forget to prepare any supporting documentation, such as the necessary comparable gross receipts to meet the 30% rule.
Consider using a FinTech solution to streamline the process. For example, in partnership with Biz2Credit, the AICPA launched CPALoanPortal.com, a business funding portal designed to handle forgiveness applications from multiple clients as well as new applications for a second round of PPP funding. AICPA Insights reported that functions of the portal include:
“ -A free basic service for small businesses or those of you advising only a few clients
-A more robust set of fee-based tools in a single platform to help you manage multiple clients in a standardized way
-Upfront integration with leading payroll providers (with more providers being added regularly) to intake data automatically from official payroll reports
-Access to the power of AICPA technical input and calculators
-Payment of agent fees for firms registered for one of the paid plans available through the platform (assuming this is permissible in PPP2, as it was in the original PPP).”
Now that a second relief package has been passed, countless small businesses will be relying on their financial advisors to get their PPP applications through the door the moment it opens. Creating a plan, organizing your team, preparing engagements, advance applications and FinTech are some of the best ways to ensure that the coming PPP application phase will be more efficient and effective, resulting in better results for your clients’ businesses and yours. Continue to follow the MICPA for updates regarding the next PPP including resources you and your clients can tap as they arise.
References
- Nilsen, Ellan & Li Zhou. “Congress has Officially Passed a $900 Billion Covid-19 Relief Package.” Vox. 21 Dec. 2020. Accessed on 22 Dec. 2020.
- Asgeirsson, Erik. “Business Funding: A Key New Advisory Category for Your Firm.” AICPA Insights. 15 Dec. 2020. Accessed on 21 Dec. 2020.