Treasury and SBA Announce Agreement on Providing Identities of PPP Borrowers

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Business people talking in corridorAn issue orbiting the Paycheck Protection Program (“PPP”) loan this year is the public disclosures of the PPP borrowers. Earlier in the year, the CARES Act ushered in several incentives to provide an economic stimulus for businesses impacted by the COVID-19 pandemic. One of the more well publicized provisions was the PPP loan that not only provided much-needed capital to small to mid-sized businesses, but also the opportunity for loan forgiveness when the loan proceeds were primarily used by the borrower to cover their payroll costs. 

There have been many twists and turns concerning this over the past several months for borrowers. Borrowers were tasked with determining how to apply for a PPP loan; how much they could apply for; how much of the loan could be forgiven; and how to apply for loan forgiveness. A question circling the entire PPP program was whether the identity of the PPP borrowers would be made public. There were many members of Congress that wanted the business names to be public information in an effort of full transparency by Congress even during the pandemic. Others felt this might compromise confidential proprietary details of the business.

Legislation was introduced in Congress to force disclosures of the PPP borrowers, but this failed to gain enough traction to move ahead. However, congressional leaders and the Treasury continued to talk about the matter of PPP borrower identification. At times it seemed the borrower information would be disclosed, then reports surfaced that no disclosure would occur. Finally, on Friday, June 19, 2020, the Treasury, SBA, and key congressional leaders reached a compromise agreement on PPP borrower disclosure.

Treasury Secretary Steven Mnuchin announced: “I am pleased that we have been able to reach a bipartisan agreement on disclosure which will strike the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors.”

Details of the PPP Borrower Disclosure

For PPP loans over $150,000, the agreement calls on the following information about the borrower on its PPP loans to be disclosed by the SBA:

  • business names;
  • business addresses and zip codes;
  • NAICS codes;
  • business type; demographic data;
  • not-for-profit information; and
  • jobs supported.

PPP loan amounts will then be provided in the following ranges:

  • $150,000-$350,000
  • $350,000-$1,000,000
  • $1,000,000-$2,000,000
  • $2,000,000-$5,000,000
  • $5,000,000-$10,000,000

For loans under $150,000, fewer details will be provided. The Treasury and SBA indicated that for loans below $150,000, loan totals will be released and be aggregated by:

  • zip code;
  • industry;
  • business type; and
  • various demographic categories.

Next Steps

While an agreement to disclose the names and other information of the borrowers was reached in Washington, some of the specifics on this disclosure need to be ironed out by the SBA. Borrowers, however, need to realize that public disclosure of their PPP loan is coming soon and to be prepared for it. Closely held businesses that typically avoid publicity may soon find themselves cast into the limelight and the subject of questions from the media or other parties. Even if the PPP loan was appropriate under the circumstances, the matter can become a significant PR concern for the business or organization. The company should develop a communications plan if called on to defend their receipt of the PPP loan. They should also decide how this messaging will be delivered and who will deliver it. 

Watch for any SBA updates in the coming weeks, and please contact your Sikich advisors with any questions.

About our authors

Jim Brandenburg

Jim Brandenburg

Jim Brandenburg, CPA, has extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions and tax legislation. His expertise includes working with owners of closely held businesses to identify tax planning opportunities and assist them in implementing these strategies.

Tom Bayer

Tom Bayer

Thomas E. Bayer, CPA, CExP, has more than 25 years of experience providing a broad range of accounting, tax, and business advisory services to commercial clients across various industries and Sikich offices. Tom has specialized expertise in the areas of business succession planning, tax planning and compliance, and business advisory. He puts his business succession planning abilities and knowledge to work firm-wide, serving clients in advisory services across the country.

Kyle Adams

Kyle Adams

Kyle Adams is an account director in Sikich’s public relations practice. He develops and executes marketing communications, media relations and social media programs to help companies raise brand awareness, promote products and services, and showcase expertise. He specializes in strategically pitching and securing media coverage for clients in business and trade publications; writing bylined articles, white papers, case studies and news releases; and managing social media campaigns.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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