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Accountants’ Key Role in Securing PPP Funding


Small to medium-sized businesses have weathered quite a storm over the past year. As accountants with business-owning clients,  you can help to captain the ship.

Mar 1st 2021
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With the implementation of the Paycheck Protection Program (PPP)’s second round some relief is in sight for your SMB clients, as 2020 has had a significant impact on them.

According to the April 2020 Current Population Survey from the U.S. Bureau of Labor Statistics, the number of active small business owners in the United States fell by 3.3 million or 22 percent during the first three months of the COVID-19 pandemic, from February to April 2020.

The pandemic has taken its toll on these enterprises' daily operations, and the road to recovery is still a long one. For those seeking financial relief, remember that PPP loans don’t come as a free pass, and if your client’s company is still looking to apply for funding, there are some key measures to be aware of.

PPP Second Draw Eligibility and Newly Announced Nuances

In order to be eligible for the PPP, your business client must certify (or provide documentation) showing a reduction of 25 percent or more in revenue from a single quarter when comparing 2019 to 2020. Your client must be a business that was operating before February 15, 2020, with at least one employee and must employ no more than 300 employees.

Certain businesses will receive special allocations or increased funding with this round of the PPP. As of the announcement by President Biden on February 22, 2021, the focus for this second round will be on “mom and pop” businesses. These small businesses, which have fewer than 20 employees, will have a two-week exclusive window to apply for the funding.

This announcement also included some changes in eligibility rules that will become effective the first week in March. Self-employed persons, sole proprietors and independent contractors who were given decreased funding due to the loan being based on the number of employees can now qualify for more money.

Businesses with non-fraud related felonies, individuals delinquent on their federal student loans and some non-citizen residents, such as green card holders or those in the country on visas, can now apply. There will also be an increase in types of non-profit organizations that can qualify for the loan.

The new Democratic-backed American relief bill that is being discussed in Congress would add $7 billion to the PPP program. If approved, the bill will also provide $15 billion to the Emergency Injury Disaster Loan program, imparting long-term, low-interest loans from the Small Business Administration. That’s alongside $25 billion to a new grant program specifically designed for bars and restaurants.

Navigating PPP

As an accountant for a small to medium-sized enterprise (SME), you must set your clients up for success when applying for funding. This, like most things in accounting, comes down to proper preparation. Good record keeping is critical to obtain funding in any capacity, PPP or otherwise.

Making sure that your clients are gathering, organizing and keeping documentation and required reports is the first step. Communicating with them the importance of keeping their financials updated and being prompt and accurate in responses to your accounting team is also essential.

This compiles all of the needed information into one centralized and easily accessible place. With the particulars in place, you as the accountant can verify that everything is properly coded and help to increase the likelihood of your client obtaining funding.

The Particulars of Payroll

You should also check with your clients about the payroll system or provider they are using. Whether they are using an internal or external payroll system, they need the capacity to create reports specific to the PPP. This average monthly payroll application is one of the requirements for PPP and is important to have completed with the utmost accuracy.

Most payroll systems have already implemented a template for the PPP monthly payroll report and will calculate everything for you. This should make filling it out relatively straightforward, but if you have a client who is self-employed, the report will have to be filled out manually. Self-employed individuals need to keep meticulous records of their contracts and payments to ensure that they have the documentation needed for this PPP monthly report.

Once Funding is Received

If your client does receive funding, they must take some important steps to ensure they are staying on top of their money management. Understanding what's allowable and not allowable in terms of the loan is the best place to start, so you can be sure that you know the rules of the game.

Segregating the loan funds in your books will make your money more easily accountable and help your client better determine what they can spend that money on. Finally, be sure to keep your clients up to date on any changes and variances as they are announced from the government, as there are bound to be some updates as we move forward.


With more money to give, the PPP loan can further target funds toward businesses that need it. As an accountant, you can help steer the ship to help clients obtain this funding by proving their individual needs.

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