Although the Paycheck Protection Program (PPP) received additional funding on April 24th, many small businesses impacted by the COVID-19 health crisis still report difficulty with navigating the application process. The Treasury Department has responded by issuing more PPP-related guidelines and information on its CARES Act assistance page.
Key points of clarification include the following:
- An updated Loan Report (Round 2) provides detailed information about loan amounts, locations, lenders and other public information (from 04/27/20 – 05/01/20).
- Updated FAQs offer additional answers to questions about the PPP in several new Q&A topics (Numbers 36-45) which may be particularly helpful to many borrowers. Some of the key topics are:
- Counting full-time and part-time employees to determine loan eligibility.
- Requiring companies to account for other adequate sources of liquidity.
- The SBA’s decision to “review” all PPP loans over $2 Million (and other loans, if appropriate) to determine the borrower’s need for the loan.
- How to account for attempts to rehire employees who decline job offers.
- Guidance on the “certification requirement” that the loan must be “necessary to support the ongoing operations of the Applicant.”
- The “safe-harbor” period to return the loan if the borrower determines that it is unable to meet the certification requirement (the period is now extended to May 14, 2020).
- Long-awaited guidance on calculating the 500 or fewer employee size standard. Most notably, an applicant must count all of its employees and those of its U.S. and foreign affiliates (absent a waiver or exception).
- Four Additional “Interim Final Rules” (in addition to those already in place on the Treasury Department’s web site). The new rules cover:
- Additional Criterion for Seasonal Employers
- Corporate Groups and Non-Bank and Non-Insured Depository Institution Lenders
- Nondiscrimination and Additional Eligibility Criteria
As always, we are happy to assist you with any aspect of the government’s relief assistance provided for under the CARES Act, including the PPP and EIDL programs. Please contact Michael Cashton at email@example.com or (401) 744-9647 or visit our website’s Contact Us page.
Michael Cashton is a member of our New England-based team and brings over 20 years of experience representing emerging businesses, major corporations, and individual entrepreneurs across a range of industries, including consumer goods, SaaS/PaaS, ad-tech, digital gaming, e-commerce, retail, food service, and arts/entertainment. Before joining Outside GC, Michael served as VP of Legal for Habsro, Inc., an international consumer products and branded entertainment company. He can be reached at firstname.lastname@example.org or 401-744-9647.