Government Contracts SBA Issues More Guidance on Paycheck Protection Program
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Tuesday, June 2, 2020

SBA Issues More Guidance on Paycheck Protection Program

By Government Contracts Editorial Staff

The Small Business Administration has provided additional guidance supplementing interim final rules (¶70,425.654, ¶70,425.655, ¶70,425.656, ¶70,425.657) implementing sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (PL 116-136). Section 1102 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 nationwide adversely impacted by COVID-19. One new interim final rule (¶70,425.658) furnishes guidance on requirements for promissory notes and authorizations, eligible businesses, business participation in employee stock ownership plans, eligibility of businesses presently involved in bankruptcy proceedings, and a limited safe harbor for a certification. A second rule (¶70,425.659) limits the amount of PPP loans that any single corporate group may receive and provides additional guidance on the criteria for non-bank lender participation in the PPP. The third rule (¶70,425.660) provides guidance on nondiscrimination obligations and additional eligibility requirements. The first two rules went into effect on May 4, 2020, and comments on these rules are due June 3, 2020. The third rule has a May 8, 2020, effective date, with comments due June 8, 2020.

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