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Small businesses should focus on PPP’s intent, keep using funds

Shutterstock_1717147000When the Department of the Treasury and Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) many businesses saw an opportunity to stay open and their employees paid during this very difficult time.

There is no question that small businesses are the heart of our nation’s economy, and without them our road to recovery will be longer and significantly more difficult. I am inspired every day by the stories I hear about our profession’s tireless efforts to support small businesses everywhere. The AICPA is committed to our economic recovery, and I would like to provide some perspective to advance the understanding of the PPP.

The speed at which so many small businesses accessed PPP funds reflects a commitment to staying open, keeping employees paid and serving their community. Yes, there have been bumps in the road. Challenges are expected for a program of this magnitude and the speed at which it was made available. Since the launch of the PPP in April, the SBA has processed nearly four million loans, totaling more than half a trillion dollars. An extraordinary feat.

Unfortunately, the pendulum has shifted from can-do optimism to, for some, moral outrage. Now, millions of small businesses feel pressured to return money they received or question whether they should apply for PPP funds.

Business that see PPP funds as important to keeping employees and remaining viable should not be concerned about keeping or applying for PPP funds.

As many CPA firm leaders know, small businesses are far from out of the woods. Even in a normal economic environment, they have very few options when they need cash to maintain operations. To stay afloat, the smallest often rely on credit cards or bank loans, which require some form of collateral and a repayment plan. We are in unprecedented and uncharted times, and the journey ahead will have many challenges, most of which cannot be fully seen today.

This impacts all businesses. We need to be careful to not create additional hurdles — either logistical or moral — that could make small businesses choose bankruptcy and layoffs instead of keeping or applying for PPP funds.

Policymakers, Congress, business leaders and the media should remain focused on the intent of the PPP, which is to keep small businesses open and employees paid. This is critical to ensuring that our economy quickly recovers.

The PPP was written to make financial relief quickly available to as many small businesses as possible, without requiring them to jump through hoops or make complicated calculations. The application requires a good faith certification that the future of the business is economically uncertain.

Few businesses owners knew in April the depth and breadth of the economic distress they would incur. The vast majority of small businesses who have applied for a PPP loan greatly needed the relief and have made an appropriate assessment of how they have been impacted. In today’s economy, it is nearly impossible to find a company whose financial situation has not been negatively impacted to some degree.  

The last thing our economy needs is small businesses laying off employees and closing shop for good because they chose to return PPP funds or not apply at all.

The Paycheck Protection Program remains available and small businesses should continue to apply for relief. Our nation’s economy will recover, and the importance of America’s small businesses has never been greater.

Barry Melancon, CPA, CGMA, President and CEO of the American Institute of CPAs (AICPA) and CEO of the Association of International Certified Professional Accountants

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