02.10.21 | Assurance Chat
Small businesses are facing challenges during this most recent round of applications for Small Business Administration (SBA) Paycheck Protection Program (PPP) forgivable loans. As members of the AICPA, we are proud to advocate for the profession and our clients! Last week, the AICPA sent a letter to the SBA discussing the challenges hindering the desperately needed relief from reaching small businesses during these trying times. The four issues and related requests for action focus on:
- Challenges with Draw One & Draw Two applications being denied acceptance into E-Tran system
Issue: New validation checks, set up to avoid fraudulent loan applications, which increase the initial acceptance timeline, are causing the system to deny loan application in error. For example, people were told incorrectly that they have a criminal record or Tax ID issue.
Request: Prioritize correcting the validation process and communicate the change in the timeline for funding.
- SBA processing and resolution delays for applications successfully submitted into E-Tran system
Issue: Validation checks are causing 20-40% of successfully submitted applications to be erroneously flagged for further information. For example, Draw Two applicants who appropriately used their social security number on their first application are now required to use an EIN number which the system reads as an error because the numbers used for both loans do not match. Fixes for this error have not worked.
Request: Clarify the process to resolve these errors and communicate the pervasiveness of the issue and impact on the timeline for funding.
- SBA capping of PPP Draw One and Draw Two loan amounts
Issue: Loan eligibility is capped at $35K per employee, and the system automatically reduces the approved loan amounts to lenders, confusing borrowers.
Request: Clarify and communicate additional guidance on the loan cap.
- Broad communication on available funding, overall processing and timing.
Issue: Small business are anxious that the money will run out, especially as processing times are longer than the first time around.
Request: Communicate, communicate, communicate!
The Journal of Accountancy article, AICPA Raises PPP Concerns with SBA, discusses the issues and the requests for action in further detail.
If you are facing roadblocks please let us know, so we can share your experience with the AICPA. You are not alone!
Questions? I can be reached at 516.806.1193 | BMannFalk@berdonllp.com or reach out to your Berdon advisor.
Bonnie Mann Falk is a Partner in the Quality Control (QC) Department of Berdon LLP with nearly 30 years of experience in public accounting and expertise in a variety of areas including quality management, compliance, and risk management. As a QC Partner, Bonnie advises the Firm on policies and procedures to enhance quality, increase efficiency, and elevate communication.