This week the Small Business Administration issued new guidance on the Paycheck Protection Program (PPP) in the form of two interim rules. The first interim final rule amends existing PPP rules to reflect changes in the recently enacted Coronavirus Response and Relief Supplemental Appropriations Act of 2021, including on fees, borrower eligibility, loan amounts, eligible expenses, reliance on borrower certifications and loan increases, as well as a new registration requirement for all lenders. However, SBA notes that most of this document restates existing regulatory provisions to provide lenders and new PPP borrowers a single regulation to consult on borrower eligibility, lender eligibility and loan application and origination requirements, as well as general rules on increases and loan forgiveness for PPP loans.
Meanwhile, the second rule governs second-draw loans now available for borrowers with 300 or fewer employees, that saw a 25% or greater revenue drop in 2020 compared to 2019 and that have used the full amount of their first-draw PPP loan. According to SBA, Second-Draw PPP loans are for the most part subject to the same terms, conditions and requirements as First-Draw PPP loans. The maximum loan amount is $2 million or two and a half months’ worth of average payroll costs, whichever is less. The rule covers several calculations to determine eligibility and loan amounts.
More information about the PPP second-draw loans will be e-mailed to our WCA members the evening of 1/10/21.