The Small Business Administration (SBA) issued an interim final rule (and a supplemental interim final rule) providing additional guidance regarding the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (press release). The SBA details that the program will provide forgivable loans up to $10 million to small businesses affected by COVID-19.
The SBA states that all small businesses with 500 or fewer employees, or no more than the number of employees set by the SBA’s size standards are eligible for PPP loans. The interim final rule did not explicitly address hospitals eligibility to participate in the PPP. In response, the American Hospital Association (AHA) wrote a letter to the SBA urging the agency to ensure that small and mid-sized hospitals are eligible to the participate in the program. The AHA also encouraged the SBA to issue guidance that specifically addresses hospital participation and affiliation requirements.
The agency details that loans are available to cover up to eight weeks of average monthly payroll plus 25 percent and payments are deferred for 6 months. The interim final rule outlines that proceeds of a PPP loan can be used for payroll costs, benefits, mortgage or rent payments, utility payments, interest payments, or refinancing a SBA loan made in 2020. The SBA notes that the agency will forgive a portion of the loan proceeds used for payroll costs and other designated operation expenses, provided that 75 percent of the loan are used for payroll costs.
PPP loans are available to apply for until June 30, or until the funds run out. Interested applicants can apply for a PPP loan here. The interim final rule is effective immediately, but comments will be accepted on the rule until May 15.