In response to the COVID-19 pandemic, Small Business Administration (SBA) Paycheck Protection Program (PPP) loans, administered under the 7(a) guaranty loan program, are being provided through local financial institutions. While these loans have been made primarily to for-profit entities, some NFPs have also received PPP loans. One of the most common questions is whether SBA PPP loans obtained by NFPs are subject to the Uniform Guidance single audit requirements. The good news is that the AICPA Government Audit Quality Center has recently received an answer to this question. Based on recent discussions with SBA staff, they have been informed that PPP loans made to NFPs will not be subject to single audit.

On the other hand, SBA informed them that loans made to NFPs under the Economic Injury Disaster Loan (EIDL) program are considered a direct loan program disbursed from SBA to loan recipients. Therefore, these loans are considered federal financial assistance and are subject to the Uniform Guidance single audit requirements.

If you have any questions, please reach out to your SEK Client Relationship Manager.

Source: AICPA Governmental Audit Quality Center - Alert No. 404