Sources For Updates On SBA PPP Loans Published May 6 Through May 18

Since the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law, the guidance for the Small Business Administration’s (“SBA”) Payroll Protection Program (“PPP”) has been changing on an almost daily basis, making compliance for both borrowers and lenders difficult.

Our previous Article identified the sources that the SBA released through and including May 5, 2020. This Article supplements our May 5 article by summarizing four (4) Interim Final Rules and Loan Forgiveness Application that have been published since that date.

• Ninth Interim Final Rule (Extension of Limited Safe Harbor). On May 9, the SBA published a Ninth Interim Final Rule officially extending the safe harbor deadline for the good faith certification, which had been previously extended pursuant to FAQ #43. Notably, on May 13, the SBA published FAQ #47, which extended the safe harbor deadline to May 18. (85 FR 26321, 26323). The text of the Ninth Interim Final Rule can be found here.

• Tenth Interim Final Rule (Loan Increases for Partnerships).  On May 13, the SBA published a Tenth Interim Final Rule pertaining to increases in loan amounts for partnerships that had previously applied for a PPP loan and did not include partner compensation. It also includes guidance for seasonal employers to make a similar increase. The text of the Tenth Interim Final Rule can be found here.

• Eleventh Interim Final Rule (Eligibility for Electric Cooperatives).  On May 14, the SBA published an Eleventh Interim Final Rule extending eligibility to electric cooperatives that are exempt from federal income tax under Section 501(c)(12) of the Internal Revenue Code, finding that such entities constitute businesses operated for profit. The text of the Eleventh Interim Final Rule can be found here.

• Loan Forgiveness Application.  On May 15, the SBA and Treasury jointly published the Loan Forgiveness Application and Instructions. You can access the Application here and can find a summary of the guidance such Application provides here.

• Twelfth Interim Final Rule (Foreign Affiliates).  On May 18, the SBA published a Twelfth Interim Final Rule clarifying eligibility for PPP applicants that have employees residing outside of the United States. The IFR clarifies that if an applicant, together with its domestic and foreign affiliates, does not meet the 500-employee or other applicable PPP size standard, it is not eligible for a PPP loan. The text of the Twelfth Interim Final Rule can be found here.

• FAQs.  Finally, the SBA continues to update its “frequently asked questions.” Lenders and borrowers should expect that future versions of these FAQs will continue to be published. The text of the most recent FAQs can be found here.

When analyzing eligibility, compliance, or other issues related to the PPP loans, both lenders and borrowers should ensure they have consulted the proper sources. If you have any questions regarding the SBA PPP loans, or other aspects of the CARES Act, please contact a Baird Holm LLP attorney.