pay loan PPP FAQ & Announcements Timeline
03.31.20 Paycheck Protection Program
SBA releases Paycheck Protection Program (“PPP”) general guidance for lenders and borrowers on the agency’s website. U.S. Treasury (“Treasury”) releases one-page overview of the PPP.
04.03.20 FAQs, Affiliation Rules, Borrower Application, and FinCEN Guidance
SBA and Treasury release first PPP FAQs (Question 1). Addresses the borrower’s responsibility to provide accurate payroll costs and expects lenders to use a good faith review.
SBA releases Affiliation rules for the Paycheck Protection Program describing four tests for affiliation based on control and determination of number of employees based on affiliates for eligibility for the PPP.
SBA releases updated borrower loan application form. Reduces certain certifications for owners of the applicant, including the criminal background certification. No longer requires all owners to certify to the application.
FinCEN issues guidance on BSA obligations during COVID-19 (references PPP)04.06.20 FAQs #2-18
SBA and Treasury release second PPP FAQs (Questions 2-18). Provides information on the size requirement for PPP eligibility and state that the lender is under no duty to confirm affiliation status of the applicant. Includes information on the $100,000 salary cap, sick leave, and other payroll expenses used to determine the maximum loan amount as well as other questions related to the borrower application. States that applicants must exclude independent contractors from payroll expenses. This FAQ states that the new questions do not affect applicants who applied before this FAQ was published and that applicants may rely on the laws, rules, and guidance available at the time of the relevant application.
04.08.20 FAQs #19-20
SBA and Treasury release third PPP FAQs (Questions 19-20). Allows the lender to use their own promissory note or use the SBA provided note. Also states that the eight-week forgiveness period begins on the first disbursement of the PPP loan, and states the lender must disburse the funds within 10 days of loan approval. SBA releases new lender application form.
04.09.20 Federal Reserve Announcement and Third Interim Final Rule
Federal Reserve announces PPP Liquidity Facility (“PPPLF”) to bolster the effectiveness of the PPP and releases the PPPLF Term Sheet. Interagency interim final rule released to neutralize capital effects for participating in PPPLF.
04.13.20 FAQ #21-25
SBA and Treasury release another set of PPP FAQs (Questions 21-25). Includes information on SBA loan authorization, non-bank lender eligibility, and maximum loan amount caps and affiliation rules for franchises, hotels, and restaurants. Also includes lender’s obligation to require information on applicant’s ownership.
04.14.20 FAQ #26-28
04.15.20 FAQ #29, Federal Reserve Announcement, and Faith Based Org FAQ
SBA and Treasury release another set of PPP FAQs (Question 29). Allows lenders to use scanned copies of documents and e-sign for loan applications.
Federal Reserve Board announces rule change to bolster effectiveness of SBA’s PPP. Temporarily modifies Section 22(h) of the Federal Reserve Act and Regulation O requirements to allow banks to make PPP loans to businesses owned by their directors and certain shareholders, subject to certain limits and without favoritism.
SBA and Treasury release another set of PPP FAQs addressing faith-based organizations and application that are affiliated with faith-based organizations.
04.16.20 PPP Runs Out of Funding and Federal Reserve Announcement
SBA releases IFR with guidance on self-employed individuals and addressing eligibility issues for business concerns and requirements for pledges of PPP loans. Includes interested bank director guidance.
PPP runs out of funding, SBA closes E-Tran system Federal Reserve announces the PPPLF is fully operational. Federal Reserve Banks begin accepting applications and ready to accept pledges of PPP loans on Monday, April 17, 2020.
04.17.20 FAQ #30
SBA and Treasury release another set of PPP FAQs (Question 30). Addresses that lenders may sell PPP loans into the secondary market without SBA prior approval.
04.23.20 FAQ #31
SBA and Treasury release another set of PPP FAQs (Question 31). Adds a safe harbor for borrowers that return funds prior to May 7, 2020. SBA adds a new “adequate liquidity” test for all applicants of PPP loans to assess other forms of liquidity when making the Economic Necessity Self Certification. Initially addresses applicants owned by large companies. Lenders may rely on borrower’s self-certification and do not need to investigate.
04.24.20 Health Care Enhancement Act, Fourth Interim Final Rule, Fifth Interim Final Rule, Calculation Guidance
Paycheck Protection Program and Health Care Enhancement Act signed into law, adding an additional $310 billion to the PPP with no less than $30 billion reserved for lenders with less than $10 billion in assets and an additional no less than $30 billion for lenders with between $10 billion and $50 billion in assets.
SBA and Treasury release another set of PPP FAQs (Questions 32-35). Includes additional information for payroll costs for housing stipends, principal place of reside for employees, and information on eligibility for agricultural applicants.
SBA releases IFR on requirements for promissory notes, authorizations, affiliation, and borrower eligibility. Provides that lenders may use own promissory note and that lenders do not need a separate SBA Authorization for the SBA to guarantee a PPP loan. Clarifies that hedge funds are ineligible to participate, describes how eligibility for portfolio companies of private equity funds is based on affiliation rules, and establishes that hospitals owned by governmental entities may be eligible for PPP loans if they are otherwise eligible.
SBA releases IFR on calculating loan amounts for seasonal businesses. Provides seasonal employers with an additional option of using any consecutive 12-week period between May 1, 2019 and September 15, 2019 for determining the maximum loan amount.
SBA and Treasury release guidance on how to calculate maximum loan amounts by business type.
04.25.20 Department of Agriculture FAQ
SBA and Treasury release first PPP FAQs (Question 1). Addresses the borrower’s responsibility to provide accurate payroll costs and expects lenders to use a good faith review.
SBA releases Affiliation rules for the Paycheck Protection Program describing four tests for affiliation based on control and determination of number of employees based on affiliates for eligibility for the PPP.
SBA releases updated borrower loan application form. Reduces certain certifications for owners of the applicant, including the criminal background certification. No longer requires all owners to certify to the application.
FinCEN issues guidance on BSA obligations during COVID-19 (references PPP)04.26.20 FAQ #32-35
SBA releases second IFR supplementing initial IFR with additional guidance regarding the application of certain affiliate rules. Rules provide further guidance on affiliation and allows for certain faith based organizations to apply for the PPP.
04.27.20 Comptroller Letter
SBA and Treasury release second PPP FAQs (Questions 2-18). Provides information on the size requirement for PPP eligibility and state that the lender is under no duty to confirm affiliation status of the applicant. Includes information on the $100,000 salary cap, sick leave, and other payroll expenses used to determine the maximum loan amount as well as other questions related to the borrower application. States that applicants must exclude independent contractors from payroll expenses. This FAQ states that the new questions do not affect applicants who applied before this FAQ was published and that applicants may rely on the laws, rules, and guidance available at the time of the relevant application.
04.27.20 Sixth Interim Final Rule, FAQ #37, SBA and Treasury Joint Statement
SBA and Treasury release third PPP FAQs (Questions 19-20). Allows the lender to use their own promissory note or use the SBA provided note. Also states that the eight-week forgiveness period begins on the first disbursement of the PPP loan, and states the lender must disburse the funds within 10 days of loan approval. SBA releases new lender application form.
04.29.20 FAQ #38-39
SBA and Treasury release another set of PPP FAQs (Questions 38-39). Expands on the “in operation on February 15, 2020” qualification for mergers and asset sales of companies and discusses the SBA’s ability to personally review PPP applications. The SBA will review all loan applications above $2 million in addition to other loans as deemed appropriate by the SBA.
05.01.20 SBA Guidance on PPP Loans Sales and IRS Guidance
SBA releases guidance on Whole Loans Sales of PPP Loans permitting any lender participating in the PPP to sell PPP loans to other participating lenders without the SBA’s prior written consent for the Guaranty to transfer. This guidance changes the general requirement in the SBA’s Loan Guarantee Agreements that the SBA must provide prior consent for the sale or transfer of loans. Note that the guidance contains an expiration date of May 1, 2021.
IRS issues guidance that forgiven portion of PPP loans is not included in borrowers gross income.
05.03.20 FAQ #40- 42
SBA and Treasury release another set of PPP FAQs (Question 40). Provides that the SBA and Treasury will release a new IFR providing that employees who were laid off that decline an offer to be rehired will not be included for the forgiveness calculations (subject to proper documentation). Question 41 confirms applicants who rely on the Seasonal Guidance IFR posted on April 24, 2020 may still make all certifications in the Borrower Application Form. Question 42 expands “non-profit” to include hospitals under Section 115 of the Internal Revenue Code if the hospital has a written record stating it would otherwise qualify under 501(c)(3).
05.05.20 FAQ #40- 42
Info here.
05.06.20 FAQ #45
Info here.
05.13.20 FAQ #46-47
Info here.