The SBA and Treasury have released new Paycheck Protection Program guidance and forgiveness applications. This new material addresses changes brought by the Paycheck Protection Program Flexibility Act, including those to PPP loan maturity, deferral, and forgiveness. Interim Final Rule on Revisions to First Interim Final Rule clarifies that spending 60 percent of PPP proceeds on payroll costs is not a cliff requirement. Put differently, if a borrower spends only 59 percent of PPP proceeds on payroll costs, the borrower will receive More +

President Trump has signed the Paycheck Protection Program Flexibility Act of 2020 (the “Act”). The Act makes several important revisions to the Paycheck Protection Program. It: extends the covered period to use funds for eligible expenses from 8 weeks to the earlier of 24 weeks or December 31, 2020; reduces the percentage of eligible expenditures that must be used on “payroll costs” from 75 percent to 60 percent (but the 60-percent requirement is a cliff requirement: if the borrower does More +

The SBA and Treasury recently released Form 3508, the long-awaited Paycheck Protection Program (PPP) Loan Forgiveness Application. Here’s an overview. Form 3508 has four parts: a forgiveness-calculation form, a Schedule A, a worksheet for Schedule A, and a borrower-demographic form. You’ll need to submit the first two parts to your lender, along with verifying documentation. The Form identifies an October 31, 2020 “Expiration Date,” which implies a Halloween deadline. Keep the Schedule A worksheet on file. The borrower-demographic form is optional. More +

The SBA and Treasury issued new guidance on PPP loan-request certifications. Most PPP borrowers will now benefit from an automatic safe harbor, which should remove certification questions for loans under $2 million. Specifically, the guidance says that borrowers that “received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.” Most PPP borrowers will benefit because very few PPP loans exceed More +

On Friday, the SBA issued another set of rules for the Paycheck Protection Program. No, these are not the much-needed rules and guidance on forgiveness, which we still await. These new rules cover a variety of topics, including certain requirements for promissory notes for lenders, clarification on certain eligible businesses (including a prohibition on hedge fund participation), eligibility of companies with ESOPs, and eligibility of businesses currently in bankruptcy. Perhaps the most notable piece is a new repayment safe harbor for More +