ESG-focused enterprises and others tapped into the COVID-19 relief package, but some executives are concerned the support is insufficient if the virus is resurgent.
  • ESG-focused enterprises and other firms accessed the government’s pandemic relief funds, aided by the KPMG Spark accounting system, but some nonprofits are worried the monies may prove insufficient if there is another outbreak.
  • The U.S. government made almost $900 billion available to help offset the economic pain felt by businesses.
  • Small and medium-sized companies struggled to access the funds as bigger firms were given priority.

The federal government should fine-tune its $900 billion pandemic aid program to better help small and medium-sized enterprises, according to an expert in navigating the rules of the business relief plan, while one recipient worries that the stimulus may not be enough to help her nonprofit if there is another outbreak of the coronavirus.

Timothy Stiles, a partner at KPMG and the chief operating officer for the company’s Spark division, says its cloud-based online accounting platform has enabled about 250 ESG-focused enterprises and other small and medium-sized companies to secure millions of dollars in benefits from the U.S. government’s COVID-19 relief funds.

“We’ve had a very high success rate,” helping companies apply for government-funded fiscal programs, Stiles told Karma.

The Spark platform uses machine learning and artificial intelligence to categorize transactions and provides clients with real-time financial information to help them track their spending and income statements. Proof of such transactions can be useful for companies that apply for programs such as the Paycheck Protection Program, which provides loans to enterprises to meet their payroll obligations, even as they suffer from budget shortfalls due to the coronavirus outbreak. 

Through the PPP, the U.S. government offered loans aimed at helping companies retain their workers and the credit is forgivable depending on how much of the funds are spent on salaries. The program was part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES, the largest stimulus bill in U.S. history, authorized by President Donald Trump in late March.

Still, businesses experienced problems getting access to the first tranche of the government’s payout, as large banks tasked with disbursing the funds gave preferential treatment to existing larger clients, NPR reported.

The government moved speedily on the disbursement of the relief funds and the program has been well-managed, with a few glitches, Stiles says.

The government could tweak the program to better help companies, he notes. The PPP asks businesses to spend the stimulus funds within eight weeks and some advocates and policymakers have proposed giving companies more time up to 24 weeks to spend the funds. The government should also clarify what constitutes an appropriate use of the stimulus funds as some organizations struggle to understand what expenses will be considered legitimate by the authorities, he says.

Moreover, there is some uncertainty about whether companies that access the relief funds can file for tax deductions on their expenses, a matter Congress and the Treasury need to clarify, Stiles told Karma.

The PPP is considered a stimulus bill and if the funds provided to companies are viewed as income and taxed accordingly then the stimulus effect of the bill is watered-down.

Federica Bietta, the managing director for the Coalition for Rainforest Nations, is a client of KPMG Spark. Her nonprofit focuses on rainforest conservation efforts and after a delay, her organization was able to receive help from the government. Bietta is mostly concerned about whether the stimulus bill will be sufficient, depending on the trajectory of the outbreak.

“We didn’t make the first round but luckily they approved the second round and so we were pleased with that,” Bietta told Karma. “If the support is for two months then [it may be] too little depending on where the pandemic is going to move … if we have a second wave coming because we are reopening too soon.”