27 Apr

SBA Issues New FAQ on PPP Loan Necessity

Many firms in the A/E industry have either received or are considering pursuing one of the Paycheck Protection Program (PPP) loans issued during this ongoing crisis.

The PPP loans and related loan forgiveness have been a hot topic in the press, as the funding for the first round of loans was quickly depleted.  On April 23, the Small Business Administration (SBA) issued a new Frequently Asked Question (FAQ) #31 to further define its position with regard to necessity of the loan.  The full text of the FAQ can be found at the SBA’s website.

The FAQ states:

“Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”

A lot of articles are being published that provide analysis and commentary on the FAQ.  If your firm is considering a PPP loan or has already obtained one, I would suggest reading the FAQ and doing some additional research on this important topic.

I will post updates on this and other topics as we learn more – please check back here for any new information, or sign up to receive our newsletters at the very bottom of our website. If you have any questions, please email me at dan@aeclarity.com.


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Dan Purvine is the President of A/E Clarity Consulting and Training, a firm that specializes in helping A/E firms to navigate the complex rules and regulations applicable to state, federal, and local agency contracts. Dan brings to this role over 14 years of experience in the A/E industry as the Vice President of Finance and Accounting for a large engineering firm. Dan has been providing A/E industry training through A/E Clarity since 2012 and has trained thousands of people in architecture and engineering firms, CPA firms and public agencies. Dan is the former chair of the American Council of Engineering Companies (ACEC) National Audit Subcommittee and continues to work closely with FHWA and AASHTO in his consulting role with ACEC to achieve uniform application of FAR Part 31 and the AASHTO Audit Guide, and to better address the needs of A/E firms nationwide. He has been heavily involved in the development of the AASHTO Audit Guide and the National Compensation Matrix, and works closely with the AASHTO Audit Guide Taskforce to continually improve the Guide as a tool for A/E firms, State DOTs, and CPAs. Dan works closely with state ACEC organizations and many state DOTs on issues related to FAR compliance, audits, and reimbursement of A/E firm costs. A/E Clarity provides training and consulting services and through a related CPA firm, D. L. Purvine, CPA, PLLC, Dan and his team perform overhead audits for clients nationwide. Dan also served as the 2015-16 Chair of the North Carolina Association of CPAs and is a former member of the AICPA Council.