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Contributed photo / Cathy Dorvil

Among Tennessee’s small businesses, 71% received assistance through the Paycheck Protection Program, according to a U.S. Chamber of Commerce survey released last week.

The Chamber survey found that nearly all of those small businesses have exhausted their PPP funding and are seeking to avoid having to repay the Small Business Administration loans by meeting the pandemic relief requirements in the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The SBA loans may be forgiven for those business borrowers if they show that the SBA money was used for eligible payroll costs and for payments on business mortgage interest payments, rent, or utilities. A borrower can apply for forgiveness once it has used all loan proceeds for up to 10 months after the last day of the PPP loan period.

To ensure that the federal loans made through local banks, credit unions and other financial institutions comply with the loan forgiveness requirements, the SBA is expected to soon begin auditing the PPP loans.

For a federal agency that lent more money in six months than it had previously done in its 67-year history — and with changing rules as the program was unveiled — the task could be daunting.

The Paycheck Protection Program was hastily constructed in late March after Congress passed the $2 trillion coronavirus relief bill. The Treasury Department, which called most of the shots on the program, released technical guidance to banks just hours before lending began in April, and the terms shifted many times before the program ended in August. The Treasury Department has issued dozens of corrections and clarifications to its rules.

To help businesses prepare for the SBA audits, the Chattanooga law firm of Chambliss, Bahner & Stophel had created an audit counsel practice area to help the recipients of the PPP loans, or other Department of Health and Human Services Provider Relief Funds.

“Whether these audits begin in a few months or a few years, our team is taking a proactive approach and is ready to assist our clients and their evolving needs,” said Mark Cunningham, managing shareholder for Chambliss.

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Contributed photo / Rachel Ragghianti

Cathy Dorvil, a Chambliss shareholder and section chair, is leading the practice area that includes COVID-19 task force co-chairs Justin Furrow and Jim Catanzaro. Courtney Keehan, Cal Marshall and Rachel Ragghianti, a CPA, are also working to help clients prepare for the SBA audits.

Dorvil said Chambliss has been working with business clients throughout 2020 to help them navigate the tax, audit and relief needs amid the ongoing coronavirus pandemic.

“Our employee group was inundated this spring with so many questions from clients about PPP loans, who they could keep on the payroll and how they should handle requests for leaves,” Dorvil said. “Now the government has indicated that if you reached a certain threshold of money from the Paycheck Protection Program you will be audited to make sure that there was no fraud. As we look to the future and consider the aftermath of the pandemic, we are prepared to support our clients as anticipated audits into governmental relief funds begin.”

Ragghianti said most of the business recipients of the CARES act relief measures are probably not used to being audited by the government so Chambliss established the special unit to help prepare clients and handle any required dispute resolutions.

Dorvil said the audit counsel team will provide support for areas including compliance and government investigations, regulatory and administrative proceedings, tax, financial services, litigation and risk management, manufacturing, health care and nonprofits.

Compiled by Dave Flessner who may be reached at or at 423-757-6340.