PPP Application Process
Firm – Lender Relationship
The American Institute of CPAs, after discussions with the AICPA-led Coalition and key banking leaders and stakeholders, is working to drive a common understanding and approach around the firm lender relationship related to the implementation of the Paycheck Protection Program (PPP).
These are unprecedented times and the joint efforts of lenders and CPA firms are vital to assisting small businesses. Our overall objective is to help drive an effective PPP application process that quickly directs relief funds into the hands of small business owners and their employees.
Based on our collective discussions and our understanding of the intent of the PPP program, AICPA is making the following recommendations related to the firm – lender relationship.
CPA professionals can add significant value to the PPP loan application process for both lenders and small businesses by assisting and advising their clients in the completion of these applications. Small businesses need support in gathering the appropriate data necessary for completing the applications, and lenders need to know the information has been accumulated, calculated and reviewed in a way that is consistent with PPP loan application guidance. Based on this we encourage CPA firms to offer loan application advisory and assistance services in support of their small business clients.
The CARES Act authorizes the Administrator to determine agency fees to be paid for the assistance in preparation of the loan application. The Act does not require a formal agency relationship between the small business and the CPA as part of the loan assistance and advisory services. It does, however, state that the agency fees are to be paid out of the lender fee.
Recommendations for Firm – Lender Relationship:
To help advance a clear and orderly loan application process, we’re recommending the CPA contact the lender prior to offering assistance and performing advisory work to the client. This will ensure the lender has agreed to compensate the CPA firm for its service.
If the lender agrees to compensate the CPA firm for its service, the relationship should be documented and disclosed to the small business. Documentation could take the form of a letter, sent by the CPA to his/her client, that describes the services to be performed by the CPA firm to assist and advise the client on the appropriate completion of the application. The letter could include the following:
Compiling payroll reports necessary to calculate average monthly payroll costs (i.e., PPPcompliant payroll cost report or master payroll report or other documentation relating to compensation and other eligible payroll costs)
Calculating average monthly payroll costs in accordance with PPP guidance
Reviewing final application before submission