Government Contracts More Guidance from SBA on Paycheck Protection Program
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Wednesday, June 24, 2020

More Guidance from SBA on Paycheck Protection Program

By Government Contracts Editorial Staff

The Small Business Administration has issued supplemental guidance on interim final rules (see ¶70,425.654 through ¶70,425.666) implementing sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (PL 116-136). Section 1102 of the CARES Act temporarily added the Paycheck Protection Program to SBA’s 7(a) Loan Program, while section 1106 provided for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The intent of the PPP is to provide economic relief to small businesses adversely impacted by COVID-19. Two new interim final rules (¶70,425.668, ¶70,425.669) provide guidance on preparing and submitting loan forgiveness applications and information on SBA’s process for reviewing PPP loan and loan forgiveness applications. The rules also seek to help PPP lenders that make loan forgiveness decisions. These rules went into effect on May 28, 2020, with comments due July 1, 2020. An additional interim final rule (¶70,425.667) extends the date by which certain borrowers may repay their loans, from May 14, 2020, to May 18, 2020. This change allows borrowers to take advantage of a safe harbor for a required CARES Act certification. The rule also extends the timeframe for submission of the initial SBA Form 1502 report for PPP loans. This rule has a May 26, 2020, effective date, and establishes June 25, 2020, as the comment due date.

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