The U.S. Department of the Treasury and the Small Business Administration (SBA) have been busy issuing guidance on the Paycheck Protection Program (PPP), all of which is housed on the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assistance for small businesses section of the Treasury’s website. Recently, the SBA and Treasury issued two interim final rules (IFRs) and the SBA issued a procedural notice to collectively address loan forgiveness.
In case you are wondering, an interim final rule is used when an agency finds that it has good cause to issue a final rule without first publishing a proposed rule. This type of rule becomes effective immediately upon publication in the Federal Register. The agency accepts comments and will alter the rule if warranted.
We will strive to keep you updated as events unfold.
On May 22, the SBA and Treasury issued an IFR, “Business Loan Program Temporary Changes; Paycheck Protection Program – Requirements – Loan Forgiveness,” to help borrowers with loan forgiveness applications, to help lenders make loan forgiveness decisions, and to inform borrowers and lenders of the SBA’s process for reviewing PPP loan applications and loan forgiveness applications. The goal is to provide a high degree of certainty to borrowers so they will be able to take immediate steps to maximize loan forgiveness amounts (for example, either rehiring employees or not laying off employees during the covered period).
This rule, which became effective on May 28, allows for immediate implementation of the forgiveness component of the PPP. Comments are due on or before July 1.
For the general process to obtain forgiveness, the IFR states: