Government Contracts SBA Business Loan Program Changes Address Paycheck Protection
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Tuesday, May 12, 2020

SBA Business Loan Program Changes Address Paycheck Protection

By Government Contracts Editorial Staff

The Small Business Administration has issued interim final rules implementing sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (PL 116-136). Section 1102 of the Act temporarily added the Paycheck Protection Program to SBA’s 7(a) Loan Program, while section 1106 provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The first rule (¶70,425.654, effective April 15, 2020, comments due May 15, 2020) outlines the key provisions of SBA’s implementation of sections 1102 and 1106 in formal guidance. The second rule (¶70,425.655, effective April 15, 2020, comments due May 15, 2020) amends SBA 121.103 and adds new Appendix A to SBA Part 121, Paycheck Protection Program Sample Addendum A, to provide additional guidance regarding the application of certain affiliate rules. The third rule (¶70,425.656, effective April 20, 2020, comments due May 20, 2020) supplements the first rule and revises SBA 120.435 to provide guidance for individuals with self-employment income who file a Form 1040, Schedule C. The third rule also addresses eligibility issues for certain business concerns and requirements for certain pledges of PPP loans.

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