Paycheck Protection Program: Update

The SBA recently posted an interim final rule on the Paycheck Protection Program, effective immediately. It also posted several new forms:

•· Updated borrower application form

•· Updated lender application form

•· PPP New Lender Application Form (Federally Insured Depository Institutions, Federally Insured Credit Unions, Farm Credit System Institutions)

The interim final rule provides for several clarifications and new provisions, a few to note:

•· At least 75 percent of PPP loan proceeds must be used for payroll costs. No more than 25 percent of the loan forgiveness amount may be attributable to nonpayroll costs, e.g., mortgage, rent, or utilities.

•· Loans have a 1% interest rate and a maturity of 2 years.

•· Confirms “E-signature or e-consents can be used.”

The rule reaffirms that PPP loans are available “first-come, first-served.” $349 billion is available. How long that amount will last remains to be seen.

We encourage you to work with your professional advisers to determine whether the PPP is the right choice for you. Your lender is also a great place to start. For legal advice specific to the operation of your Minnesota business, please contact us at Dunlap & Seeger, P.A.

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