The U.S. Small Business Administration (SBA) published a new Interim Final Rule (IFR #18) on June 12, 2020. It changes the first IFR, which provided, among other things, that a Paycheck Protection Program (PPP) loan would not be approved if a 20 percent or more equity owner of the applicant has been convicted of a felony within the last five years. However, under the new IFR #18 the time frame within the exclusionary rule has been limited to one year for most felonies. But, felonies that involve fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance will still have the five year exclusionary rule applied. The SBA has also issued updated applications for borrowers and lenders depicting this change.
For further information, please contact any member of Taft’s SBA Task Force.
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