Late in the evening on May 13, 2020, the Small Business Administration (SBA) posted interim final rule supplements to the Paycheck Protection Program (PPP) under the CARES Act. The new guidance applies to companies that are eligible to ask for more PPP money because "some PPP loans were approved to partnerships or seasonal employers before the additional guidance was issued and, as a result, those businesses may not have received PPP loans in the maximum amount for which they are eligible."
This interim final rule also authorizes all PPP lenders to increase existing PPP loans to partnerships or seasonal employers to include appropriate amounts to cover partner compensation in accordance with the interim final rule posted on April 14, 2020, or to permit the seasonal employer to calculate its maximum loan amount using the alternative criterion posted on April 28, 2020.
Additionally, this interim final rule delays the timeframe for lenders to report the loan on SBA Form 1502 to May 22, 2020. Increases submitted outside of this date will not be forgiven and the lender will not earn a processing fee on such amounts.
Lastly, in the SBA and Department of Treasury’s FAQ document, FAQ #47 extended the safe harbor period (which was originally set to expire on May 7, then later extended to May 14). The safe harbor period now expires on May 18, 2020. This second extension is “to give borrowers an opportunity to review and consider FAQ #46,” which was issued earlier in the day on May 13, 2020. For additional information on FAQ #46’s guidance related to the good faith certification, see SBA Part Eleven.
For further information, please contact any member of Taft’s SBA Task Force.
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