SBA Publishes Interim Final Rule on Eligibility of Affiliates for Temporary Business Loan Programs: Paycheck Protection Program

On April 15, 2020, the U.S. Small Business Administration (SBA) published an interim final rule (the Initial Rule) announcing the implementation Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). The Act temporarily adds a new program, titled the “Paycheck Protection Program,” to the SBA’s 7(a) Loan Program which provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program (or PPP). This interim final rule supplements the Initial Rule with additional guidance regarding affiliate rules and requests public comment. The interim rule discusses how affiliates will be considered in determining the borrower’s eligibility for PPP.

Comments must be received on or before May 15, 2020.

This interim final rule is effective April 15, 2020.

This interim final rule applies to applications submitted under the Paycheck Protection Program through June 30, 2020, or until funds made available for this purpose are exhausted. Even though this rule is already effective, SBA may use information from public comments to identify issues and make corrections in the rule, if necessary.

Read the notice at 2020-07673. Submit comments to https://www.regulations.gov/comment?D=SBA-2020-0019-0001.

Advocacy contact: Jennifer A. Smith at Jennifer.Smith@sba.gov.