Novel SBA Guidance Simplifies Key PPP Provision


Partnering with the Treasury Department, The U.S. Small Business Administration launched novel guidance offering vital clarifications for individuals taking advantage of the Paycheck Protection Program. Published on June 12, the Interim Final Rule edits the SBA’s Final Rule released April 15, 2020, to tackle changes included in the PPP.  One key item in the PPPFA relates to the requirement that 75% of the loan forgiveness quantity must have been spent on payroll expenses during the 24-week loan forgiveness covered period. This requirement has been lowed to 60% under the PPPFA.

The novel guidance also:

  • Prolongs the covered period for loan forgiveness from eight weeks subsequent to the date of loan disbursement to 24 weeks after the date of loan disbursement. Borrowers who have already received PPP loans retain the choice to utilize an eight-week covered period.
  • Offers a safe harbor for reductions in loan forgiveness based on reduction in full-time equivalent workers for borrowers unable to return to the same level of business activity the business was operating at prior to February 15, 2020.

Click here to read the guidance in full.

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