Insights

Interim Final Rule for PPP issued

April 03, 2020

In trying to keep you as up to date as possible, linked is the Interim Final Rule for the Payroll Protection Program (PPP).  For those that don’t know what an interim final rule means, it is essentially the final rule with a timeframe to make additional comments and clarifications.  It is used when something is passed and implemented quickly.

Below are the high-level bullet points that I thought were new or provided more clarification.  The big one is the interest rate is 1%, not 0.5%.

  • Lenders are not required to comply with the SBA’s lending criteria.  They can rely on certifications of the borrower to determine eligibility and use of the proceeds.
  • Lenders will be held harmless for borrowers’ failure to comply with program criteria
  • If you do not have traditional payroll documentation, you can provide other forms such as bank records that can show your payroll.
  • You are ineligible if you are a household employer (i.e., you have a nanny or housekeeper)
  • The applicable interest rate is 1% and the term is two years.  This is different from the prior guidance of 0.5% and 2 years. 
  • E-consents/E-signatures are permitted.
  • PPP is first come, first served.
  • PPP loan payments are deferred for 6 months, but interest will accrue during the deferral period.
  • Independent contractors do not count as employees for PPP loan forgiveness
  • Applicants must submit Form 2483 and payroll documentation.  Lenders must submit Form 2484 electronically.
  • If you received an EIDL loan from 1/31/2020 – 4/3/2020 and it was not used for payroll costs, then you are eligible for a PPP loan.  If your EIDL loan was used for payroll costs, then the PPP loan must be used to refinance your EIDL loan.
  • If you received any advance (up to $10,000) on the EIDL, it will be deducted from your loan forgiveness amount on the PPP loan.
  • Agent Fees (i.e. consultants) will be paid by the lender from the fees they receive from the SBA.  Fees may not be collected from the borrower or out of the PPP loan proceeds.

I am sure there are still lots of questions.  Let us know if we can help answer any of them (to the best of our ability).

Please see all of our updates at the following link:  https://mpl-law.com/resource-center/

As always, please don’t hesitate to email myself, Andy Miller (amiller@mpl-law.com) or Christian Miller (cmiller@mpl-law.com) or anyone in our office with any questions or comments. 

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