On January 6, 2021, the Small Business Administration issued an Interim Final Rule on the Paycheck Protection Program as Amended by Economic Aid Act.  A link to the Interim Final Rule is located here: https://home.treasury.gov/system/files/136/PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf

The Interim Final Rule includes information on the following topics:

• What Do Borrowers Need to Know and Do
  • What businesses, organizations, and individuals are eligible
  • What businesses, organizations, and individuals are ineligible
  • Affiliation rules generally
  • How much can be borrowed
  • What is the interest rate on a PPP loan
  • What will be the maturity date on a PPP loan
  • Can a borrower apply for more than one First Draw PPP Loan
  • Can a borrower use e-signatures or e-consents if a borrower has multiple owners
  • When will I have to begin paying principal and interest on my PPP loan
  • What forms does a borrower need and how does a borrower submit an application for a PPP loan
  • How can PPP loans be used
  • What certifications need to be made
  • Limited safe harbor with respect to certification concerning need for PPP loan request
  • Can my PPP loan be forgiven in whole or in part
  • Do independent contractors count as employees for purposes of PPP loan forgiveness
  • For loans made prior to December 27, 2020, what additional documentation must a borrower submit when the President of the United States, Vice President of the United States, the head of an Executive department, or a Member of Congress, or the spouse of any of the preceding, directly or indirectly holds a controlling interest in the borrower
  • What Do Lenders Need to Know and Do
    • Who is eligible to make PPP loans
    • Do lenders have to register in SAM.gov to make PPP loans
    • What do lenders have to do in terms of loan underwriting
    • Can lenders rely on borrower documentation for loan forgiveness
    • What fees will lenders be paid
    • Can PPP loans be sold into the secondary market
    • Do the requirements for loan pledges under 13 CFR 120.434 apply to PPP loans pledged for borrowings from a Federal Reserve Bank (FRB) or advances by a Federal Home Loan Bank (FHLB)
    • Are lenders required to use a promissory note provided by SBA or may they use their own
    • Are lenders required to use a separate SBA Authorization document to issue PPP loans
    • By when must a lender electronically submit an SBA Form 1502 indicating that PPP loan funds have been disbursed
    • How do lenders report disbursements on PPP loans that are approved for loan increases due to the Economic Aid Act
    • What Do Both Borrowers and Lenders Need to Know and Do
      • What are the loan terms and conditions
      • Do lenders have to apply the “credit elsewhere test”
      • Are there any fee waivers
      • Who pays the fee to an agent who provides assistance in connection with a PPP loan
      • Can a borrower take multiple draws from a PPP loan and thereby delay the start of the covered period
      • If a partnership received a PPP loan that did not include any compensation for its partners, can the loan amount be increased to include partner compensation
      • If a seasonal employer received a PPP loan before December 27, 2020, can the loan amount be increased based on a revised calculation of the maximum loan amount
      • Which other PPP borrowers can reapply or request an increase in their PPP loan amount
      • If a borrower’s PPP loan has already been fully disbursed, can the lender make an additional disbursement for the increased loan proceeds
      • Are recipients of PPP loans entitled to exemptions on the grounds provided in Federal nondiscrimination laws for sex-specific admissions practices, sex-specific domestic violence shelters, coreligionist housing, or Indian tribal preferences in connection with adoption or foster care practices

The Attorneys at Levene Gouldin & Thompson, LLP are available to provide advice and counsel concerning these new statutory obligations and other matters related to COVID-19.