Treasury, SBA post rules for PPP loan forgiveness
The Treasury Department and the Small Business Administration released an interim final rule for loan forgiveness under the Paycheck Protection Program, supporting small businesses with SBA-backed loans under the CARES Act that will be forgiven as long as they meet the requirements.
The program initially launched on April 3 with $349 billion in funding aimed at helping small businesses keep their doors open and retain their employees. The loans would be forgiven as long as businesses retained their employees for up to eight weeks. However, many small businesses had trouble accessing the loans or applying for them, and the funding quickly ran out as larger companies managed to get the loans with the help of their banks. Congress provided another $320 billion and the program resumed on April 27. However, the rules and eligibility and forgiveness criteria have been changing constantly, prompting many businesses to take a wait-and-see attitude.
The latest rules provide some more clarity, although they too are likely to change before they’re truly finalized. The Treasury and the SBA had earlier posted an “interim final rule” on April 27 before the loan forgiveness application was made available last week.
The latest version supplements the previously posted rules in order to help PPP borrowers prepare and submit their loan forgiveness applications as provided for under the CARES Act. It also aims to help PPP lenders who will be making the loan forgiveness decisions, and provides information to borrowers and lenders about the SBA’s process for reviewing PPP loan applications and loan forgiveness applications. It also asks for public comments, so the rules will probably be modified later to reflect the feedback received.