To usher in 2021 and provide much needed COVID relief, the SBA resumed the Paycheck Protection Program on January 11. While the first week of the program was available only to select small businesses, the program opened for all on January 19.

This second round of funding is available for both first- and second-time borrowers with some additional restrictions on second-time borrowers as follows:

  1. 300 or fewer employees.
  2. Used, or will use, the full amount of the first PPP loan before the expected disbursement date of the second PPP loan.
  3. Experienced a revenue reduction of 25% or more in gross receipts between comparable quarters in 2019 & 2020.

If you need additional funding and feel you meet the above requirements, then please get in touch with your lender as soon as possible. Word on the street is that this second-round funding will go very quickly. For liability reasons, we cannot help you apply for the loan or pull data for your application, but we will do our best to assist you with any general questions you may have.

May the odds be ever in your favor,

Your TLG Team

Click here to see the article.

When the government pledged to give small businesses billions of dollars in rescue loans during the pandemic, it was an offer almost too good to refuse: The loans could be forgiven if employers only maintained payroll.

In little more than four months, the Paycheck Protection Program doled out $525 billion in loans to 5.2 million borrowers, which economists estimate saved millions of jobs. But to date, none of the loans have been forgiven.

Lenders that helped the government deliver the money are warning that the effort is running into new delays and complications that could leave struggling employers on the hook with unanticipated debt.

Banks say the process for converting the government-backed loans into grants has been frustrating because of a lack of communication from the Small Business Administration and the Treasury Department, which have run the effort since Congress created it in March.

“Unless we get something both from a legislative perspective and from Treasury and SBA to make this process a little easier, it’s going to be a struggle,” said Naeha Prakash, associate general counsel of the Bank Policy Institute.

Banks, which loaned their own money with the expectation that it would be repaid by the government, have been submitting applications for loan forgiveness to the SBA since Aug. 10. But the lenders say the agency has been silent on whether any of the applications will be accepted. The SBA said Thursday it has received 96,000 forgiveness applications — representing fewer than 2 percent of the total loans — but has not approved or denied any of them.

“No bank I know anywhere in the country has received any money from the SBA,” said Brad Bolton, president and CEO of Community Spirit Bank in Alabama.

The warnings from lenders are raising new doubts about the implementation of the small business rescue effort, which was seen by many as a success. Its authority to issue new loans expired on Aug. 8, and there is broad, bipartisan support to relaunch the program if lawmakers can strike a deal on economic relief.

The confusion is creating potential headwinds for small businesses as they struggle to emerge from a recession.

Adding to the frustration is a growing list of unresolved questions from banks about how to handle forgiveness applications. Banks say they have gotten conflicting information from various SBA officials. Issues that have arisen include what to do for owners who are urgently trying to finish the process as they try to sell their business.

Another concern that has surprised borrowers as well as some lenders is a requirement that the proceeds from a separate SBA disaster aid program must be deducted from the amount of the payroll loan that can be forgiven. That means many businesses will likely be left with money to pay back to their bank.

“They’ve been pretty much radio silent over the last few weeks,” said Consumer Bankers Association General Counsel David Pommerehn. “There are still a lot of technical issues banks have, and we continue to push the SBA to offer some guidance.”

Thesituation echoes problems that plagued the program at its start, when the Trump administration rushed to launch the lending vehicle but left banks and businesses in the dark about key details. Banks say they have serious doubts about the SBA’s ability to execute the forgiveness phase and that it could drag out much longer than expected.

“There is significant concern as to how the process is going to work and a concern the SBA may not anticipate the magnitude of loan forgiveness applications they’re going to receive,” said Naeha Prakash, associate general counsel of the Bank Policy Institute, which represents the nation’s big banks.

The SBA, which declined to comment on questions raised by POLITICO for this story, is under competing pressure to deliver money rapidly while ensuring that it cracks down on fraud and abuse.

Pressed by House lawmakers in a hearing on Thursday, SBA Chief of Staff William Manger said “we’ve tried to make the process as simple as possible … weighing our fiscal responsibility and duty to the taxpayer to make sure that any time we are paying out funds for forgiveness they are legitimate, accurate funds and that the program has integrity.”

Banks are becoming more vocal about their complaints as they lobby Congress to pass legislation that would slash the amount of paperwork that businesses have to fill out to file for loan forgiveness, in particular those with loans under $150,000.

Lenders have been slow to start accepting the applications as they wait to see if lawmakers overhaul the process. The Consumer Bankers Association says about 80 percent of the applications that its members have received have required follow-up with clients to correct information and address issues. Bank representatives told POLITICO that there have been problems with applications from large, sophisticated businesses and small employers alike.

“Unless we get something both from a legislative perspective and from Treasury and SBA to make this process a little easier, it’s going to be a struggle,” Prakash said.

The Government Accountability Office — Congress’s watchdog arm — is also warning of problems with the process. In a report on coronavirus bailout efforts, the GAO identified “difficulties and delays for borrowers in obtaining loan forgiveness” and said there was “uncertainty about the lender’s role in the process.”

Under the program’s rules, banks and the SBA have months to decide whether a loan should be forgiven. Lenders have 60 days to submit applications to the SBA once they receive them from customers. The agency then has 90 days to make a final decision and send funds to the bank. Payments on the 1 percent interest rate loans are deferred for up to 10 months if businesses don’t apply for forgiveness, and the loan doesn’t need to be paid off for either two or five years.

But many small businesses are eager to dispense with the loans as soon as possible. Erik Asgeirsson, president and CEO of, said most owners will wait to apply but some are filing now because they are trying to sell their business.

“They need to have the loan off the books,” he said. “I’m aware of some businesses that have been in the process of being sold and the firms have worked very aggressively to get that application done and get it submitted by the bank to the SBA.”

The SBA has signaled that it will release guidance soon on the issue but it’s just one of a number of questions banks have been trying to get the agency to address.

Another area that lenders believe needs clarification relates to how soon businesses can lay off workers or cut pay if they file for loan forgiveness early. Under the Paycheck Protection Program, businesses have up to 24 weeks to spend the funds, during which time they must devote at least 60 percent to payroll if they want to maximize loan forgiveness. Banks are also still asking the SBA to clarify how they can adjust loan terms that Congress modified this summer.

Another complication that could have long-lasting effects for banks and borrowers is a requirement that businesses must reduce their forgiven loan amount by however much they also received from the SBA as a grant under its separate Economic Injury Disaster Loan Program. The SBA issued $20 billion in grants under that program to nearly 6 million small businesses. The reduction means that many business owners will likely be stuck owing money to their lenders.

Small business advocates and bank representatives say businesses and some lenders didn’t fully recognize the requirement at the outset of the program. “It’s becoming a huge issue,” said Prakash of the Bank Policy Institute.

One executive from a large bank who declined to be identified said 20-30 percent of the bank’s borrowers participated in both programs, meaning the bank would have to ask the businesses to repay portions of the loans.

“That’s not something we expected at all,” the executive said. “I’m concerned about whether customers actually understood this was the way it was going to operate. I don’t think they did.”

Click here to read the full article via Forbes

By: Richard Harroch

On June 15, 2020, the SBA announced that it was again opening up its Economic Injury Disaster Loan (EIDL) grant and loan program. This means that independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that does not have to be repaid.

Small businesses and agricultural businesses also may apply for the grant, equal to $1,000 per employee of the business up to a maximum of $10,000.

A loan for favorable terms from the SBA may also be available. There is some uncertainty as to the amount available, but up to $150,000 or $2 million has been reported.

Under the CARES Act passed on March 27, 2020, independent contractors, gig workers, and freelancers affected by the coronavirus crisis are eligible to receive the grant. The SBA sometimes refers to these grants as “advances,” but you are not required to repay this money to the government.

The application process involves filling out a simple SBA form requesting an Economic Injury Disaster Recovery Loan, which provides for the advance even if the loan is not granted.

Initially, $10 billion was allocated by the government for these grants, but due to the overwhelming amount of applications, the SBA suspended accepting new applications in mid-April 2020 due to a lapse in appropriations for the grants. But now the SBA has lifted the suspension because of legislation passed on April 24, 2020, that allocated another $60 billion for EIDL and grants thereunder.

Who Is Eligible for the Grants?

The SBA disaster loans and grants include the following eligible claimants:

  • Independent contractors (for whom there is expanded eligibility criteria)
  • Freelancers
  • Sole proprietorships, with or without employees
  • Gig workers
  • Small businesses with less than 500 employees
  • Agricultural businesses

You must have been in business as of January 31, 2020. The grants are available until December 16, 2020, but the SBA will quickly run out of money, so you should apply as soon as possible.

Where Do I Apply Online for the SBA Grant?

The application should be found at Background information from the SBA can be found at

What Advice Is There for Completing the SBA Application If You Are an Independent Contractor?

If you are an independent contractor, freelancer, or gig worker, here are some tips on filling out the application:

  • On the first question, check the third box as you are applying as an independent contractor or sole proprietorship.
  • You must add your Social Security number if you are applying as an individual independent contractor, freelancer, or gig worker.
  • The form will ask you for the gross revenues for the last 12 months for your independent contractor business and the “cost of goods sold.” You can estimate this based on what happened in 2019. Cost of goods sold means the expenses incurred in the process of providing your product or service as a freelancer, gig worker, or independent contractor.
  • Where it asks for “Owner” put your name and “100” percent owner.
  • It will ask for the date the business was established. This is the date you started doing freelance, gig work, or independent contractor work. Just estimate if you don’t have the exact date, but make sure it was before January 31, 2020.
  • The form will ask for the bank account to which you want the grant money direct deposited. You need the name of your bank, the account number (the middle number at the bottom of your checks), and the routing number (the number at the bottom left of your checks). See the question below on direct depositing.
  • For your business phone number, it’s okay to give your cell number.
  • “Is your business owned by a business entity?” The answer is no since you are an individual owner.
  • When the form asks for your business name, just enter your individual name if you don’t have a business name.
  • You can ignore the question “If anyone assisted you in completing this application …” unless you have in fact gotten help.
  • Make sure to check the box that says you want to apply for the $10,000 grant (although it will only be $1,000 for independent contractors, freelancers, and gig workers).

The form should take about 15 minutes to fill out. After it is completed and submitted, the SBA will give you a confirmation number, so keep a copy of that for any follow-up.

How Can I Make Sure I Provide My Correct Direct Deposit Information to the SBA?

Direct deposit information is as follows:

  • The name of your bank.
  • Your bank account number, which can be up to 17 characters. On the sample check below, the account number is 2020202086.
  • The “routing number” for your bank, which must contain 9 digits. On the sample check below, the routing number is 250250025.
  • Don’t include the check number (1234 on the image below).
  • Double-check that you have provided the correct numbers.

Be sure to include your routing number and account number, as seen in the example above.

How Long Will It Take to Actually Get the Grant Money from the SBA?

The first grants took over a month to be issued; hopefully, newer grants will be quicker.

The SBA has been directly depositing the grant money into bank accounts without notifying people that the funds are on the way or have been deposited. So check your bank account regularly.

Do I Need to Accept an Economic Injury Loan in Order to Get the Grant?

No. You can decide just to accept the grant you receive, and you do not have to accept an Economic Injury Disaster Loan. But the loans have favorable terms, repayable in up to 30 years.

Do I Have to Pay Back the Grant?

No. It’s clear under the CARES Act that this is a grant that does not need to be repaid. No interest payment is required either.

How Can You Contact the SBA to Follow Up on Your Grant Application?

The SBA website sets forth these means of contact:

  • Phone: SBA Disaster Assistance Customer Service Center at 800-659-2955
  • Email:

If you can’t get through to the SBA, try contacting the Small Business Development Center (SBDC) in your area. For example, the Northern California SBDC has been extremely helpful, and you can actually talk to a person live (see or call 833-ASK-SBDC). Advisors can help you with both the PPP loan process and the EIDL loans/grants as well as special programs in your state.

Click HERE to read the article via Journal of Accountancy

By: Jeff Drew (

The U.S. Senate passed the House version of Paycheck Protection Program (PPP) legislation Wednesday night, tripling the time allotted for small businesses and other PPP loan recipients to spend the funds and still qualify for forgiveness of the loans.

The bill passed in a unanimous voice vote hours after Wisconsin Sen. Ron Johnson initially blocked it. Among the key provisions is a change in the threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness to 60% of the loan amount. 

The Senate approval sends the House bill, called the Paycheck Protection Flexibility Act, to President Donald Trump, who is expected to sign it.

The vote had to be unanimous because the Senate is not officially in session. That meant that any senator could force the matter to be delayed until the Senate returned to Washington with enough members for a quorum and a vote.

Leaders from both parties in the Senate pushed to pass the legislation on Wednesday as the clock on the initial eight-week window recently expired for the first recipients of PPP loans. Johnson dropped his objections after Senate leader Mitch McConnell agreed to add a letter to the Congressional Record clarifying that June 30 remains the deadline for applying to receive a PPP loan. The bill moves the June 30 deadline for spending the PPP funds to Dec. 31 to accommodate the new 24-week window.

Following is a summary of the legislation’s main points compiled by the AICPA: 

  • PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
  • Under the language in the House bill, the payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met.  Rep. Chip Roy (Texas), who co-sponsored the bill in the House, said in a House speech that the bill intended the sliding scale to remain in effect at 60%. Senators Marco Rubio and Susan Collins indicated that technical tweaks could be made to the bill to restore the sliding scale.
  • Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
  • The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
  • Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
  • The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

The PPP in brief

The PPP launched in early April with $349 billion in funding that was exhausted in less than two weeks. Congress provided an additional $310 billion in funding in an April 21 vote, but demand for the program soon waned due to controversies over publicly traded companies and other large enterprises being awarded loans. Concerns about the attainability of loan forgiveness under the program’s rules also contributed to small businesses and other eligible entities casting a wary eye to the program.

Congress established the PPP to provide relief to small businesses during the coronavirus pandemic as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities.

PPP funds are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including tax-exempt not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees also can apply for loans in certain situations.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the pandemic, visit the JofA’s coronavirus resources page.

Jeff Drew ( is a JofA senior editor.