SBA Issues Temporary Changes to the PPP

On May 22, 2020, the SBA issued its eleventh interim final rule implementing the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  This interim rule supplements previous regulations and guidance to inform borrowers and lenders of the process established by the Small Business Administration for reviewing PPP loan applications and loan forgiveness applications.  The latest FAQ’s issued by SBA on the PPP can be found here.

The interim rule says the SBA Administrator may review any PPP loan the Administrator deems appropriate.  Review will include whether the borrower is eligible based on the provisions of the CARES Act, as wells as the SBA rules and guidance at the time of the Borrower Application Form and the Loan Forgiveness Application Form.  Review also may include whether the borrower calculated the loan amount correctly, whether the loan proceeds were used for allowable uses as specified by the CARES Act and finally, whether the borrower is entitled to loan forgiveness in the amount claimed.  If SBA determines a borrower may be ineligible for a PPP loan or to receive loan forgiveness in the amount claimed, the borrower may be required to provide additional information to the SBA to assist in its review.  If a borrower is determined ineligible, the loan will not be forgiven.