The Cares Act: Sources For Updates On SBA PPP Loans

President Trump signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act on March 27, 2020. The Act, among other things, apportions $349 billion to the “Paycheck Protection Program,” (“PPP”) which authorizes small business loans guaranteed by the Small Business Administration (“SBA”) under Section 7(a) of the Small Business Act, and $10 billion for certain economic injury disaster loans (“EIDLs”) made under Section 7(b) of the Small Business Act.

Since the CARES Act was signed into law, the guidance for PPP loans has been changing on an almost daily basis, making compliance for both borrowers and lenders difficult. This Article identifies the sources that the SBA has released in interpreting the PPP under the CARES Act. Notably, such sources and guidance are constantly being updated, therefore, anyone seeking answers should ensure they have identified all potentially governing materials and that they are relying on the most recent version.

1. The CARES Act. While lengthy, a review of the legislation itself proves to be a fruitful starting point in analyzing requirements and compliance. A link to the text can be found here.
2. The Interim Final Rule. On April 2, the SBA interpreted the CARES Act by issuing an Interim Final Rule. Notably, some interpretations contained in the Interim Final Rule, such as the interest rate for PPP loans, are contrary to the requirements of the CARES Act itself. A summary of the interpretations can be found in our article “CARES Act – Small Business Lending”. The text of the Interim Final Rule can be found here.
3. Second Interim Final Rule (Affiliation Rules). The following day, the SBA published a second Interim Final Rule, which specifically addresses the “affiliation rules” for purposes of determining whether an employer is eligible for a PPP. The text of the Third Interim Final Rule can be found here. 
4. Affiliation Guidance. Along with the publication of the supplement to the Interim Final Rule, the SBA published a guide specific to affiliation rules. The text of such guidance can be found here. 
5. FAQs for Faith-Based Organizations. On April 3, the SBA also published a set of FAQs specific to faith-based organizations, addressing both PPP and the EIDL. The text of those FAQs can be found here.
6. FAQs The SBA has published multiple versions of “frequently asked questions” on April 6, April 8, April 10, April 13, April 14, April 17, April 23, and April 24. Lenders and borrowers should expect that future versions of these FAQs will continue to be published. The text of the April 24 FAQs can be found here.
7. Third Interim Final Rule (Self-Employers and Pledges). On April 14, the SBA released a Third Interim Final Rule, which provides guidance for individuals with self-employment income who file a Form 1040, Schedule C and addresses eligibility issues for certain business concerns and requirements for certain pledges of PPP loans. The text of the Third Interim Final Rule can be found here.
8. Fourth Interim Final Rule (Large Employers). On April 24, the SBA released a Fourth Interim Final Rule providing guidance to lenders on discrete topics, including guidance regarding the self-certification as to the necessity of the loan request. The text of the Fourth Interim Final Rule 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.