The Small Business Administration (SBA) issued two interim final rules to supplement previously posted interim final rules on the Paycheck Protection Program (PPP) with additional guidance regarding disbursements, as well as guidance on the amount of PPP loans that any single corporate group may receive and criteria for non-bank lender participation in the PPP.
Regarding disbursements, SBA clarifies that a lender must fully disburse a PPP loan within 10 calendar days of loan approval. A borrow cannot take multiple draw from a PPP loan in order to delay the start of the eight-week covered period. As noted in the most recent FAQS from SBA, the amount of forgiveness of a PPP loan depends on the borrower’s payroll cost over an eight-week period, which begins when the loan is disbursed.
The interim final rule is effective May 4, 2020 (i.e., the scheduled date of publication in the Federal Register). Public comments are due 30 days after publication (i.e., on or around June 3, 2020).
Below are upcoming comment deadlines for previously issued interim final rules on PPP:
- 85 FR 20811 provides formal guidance on implementation for borrowers and lenders regarding eligibility, use of PPP loans, loan forgiveness, and other terms and conditions. Comments are due May 15, 2020 (WHG summary).
- 85 FR 20817 provides additional guidance on how affiliates will be considered together for the purposes of determining eligibility. See SBA’s fact sheet on four tests for affiliation. Comments are due May 15, 2020.
- 85 FR 21747 provides additional guidance regarding eligibility for individuals with self-employment income and certain businesses. Comments are due May 20, 2020 (WHG summary).
- 85 FR 23450 provides additional guidance regarding promissory notes, authorizations, affiliation, and eligibility. Comments are due May 28, 2020 (WHG summary).
- 85 FR 23917 authorizes eligible lenders to use alternative criteria to calculate the maximum loan amount for PPP loans. Comments are due May 30, 2020 (WHG summary).