TIMELINE OF PAYROLL PROTECTION PROGRAM PUBLISHED GUIDANCE
TIMELINE OF PAYROLL PROTECTION PROGRAM PUBLISHED GUIDANCE3/27/20 CARES Act (P.L. 116-136)4/2/20 IFR #1 (85 FR 20811 published April 15, 2020)Am I eligible? Meet size standardsIn operation as of 2/15/2020IneligibleIllegal activitiesHousehold employerFelon – 5 yrsDelinquent Federal debt – 7 years or loss to the governmentIneligible per 13 CFR 120.110 & 50 10 5(K) B, Ch 2How much can I borrow?How do I calculate the maximum amount I can borrow? ($100k cap, EIDL)Payroll Costs – what qualifies?Payroll Costs – what is excluded?Employee principal residence outside US; $100k+; FICA; sick leave allowed under PL 116-127Do independent contractors count as employees? (also – below Can my PPP loan be forgiven in whole or in part)What is the interest rate?What is the maturity date?Can I apply for more than one PPP loan?Can I use e-signatures or e-consents?Is PPP first-come, first-served?When will I have to begin paying principal and interest?Can my PPP loan be forgiven in whole or in part?What forms do I need and how do I submit an application (only states 2483 and 2484)How can PPP loans be used?What happens if PPP loan funds are misused?What certifications need to be made?What lenders are eligible to make PPP loans?What do lenders have to do in terms of loan underwriting?Can lenders rely on borrower documentation for loan forgiveness?What fees will lenders be paid?Do lenders have to apply the credit elsewhere test?What are the loan terms and conditions?Are there any fee waivers?Who pays the fee to an agent who assists a borrower?Can PPP loans be sold into the secondary market?Can SBA purchase some or all of the loan in advance?4/3/20 IFR #2 on Applicable Affiliation Rules (85 FR 20817 published April 15, 2020)Are affiliates considered together for purposes of determining eligibility?How do SBA’s affiliation rules affect my eligibility and apply to me under the PPP?Faith-Based Organizations4/14/20 IFR #3 on Additional Eligibility Criteria and Requirements for Certain Pledges of Loans (85 FR 21747 published April 20, 2020)Self-employment income with Form 1040 Schedule CPartnershipSelf-employment – calculate maximum amount and what documentation is required?Business mortgage interest/rent/utilities includes payments for vehicles and gas (pages 8-9)How can PPP loans be used by self-employed individuals (owner compensation replacement), utilityRestrictions on use of PPP loan proceeds – self-employed (75% to payroll)What amounts will be forgiven – self-employedWhat documentation is required for loan forgivenessBusinesses owned by directors or shareholders of a PPP lenderLegal gaming/gambling (REVISED BY IFR #4 on 4/24/20)Requirements for certain pledges of PPP loans4/24/20 IFR #4 on Requirements for Promissory Notes, Authorizations, Affiliation, and Eligibility (85 FR 23450 published April 28, 2020)Are lenders required to use a promissory note provided by SBA or may they use their ownAre lenders required to use a separate SBA Authorization document to issue PPP loansIs a hedge fund or private equity firm eligibleDo the SBA affiliation rules prohibit a portfolio company of a private equity fund from being eligibleIs a hospital owned by governmental entity eligibleREVISION of IFR 3 – GAMING: Are businesses that receive revenue from legal gaming eligibleDoes participation in an ESOP trigger application of the affiliation rulesWill I be approved for a PPP loan if my business is in bankruptcyLimited safe harbor with respect to certification concerning need for PPP loan request4/24/20 Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139)4/24/20 How to Calculate Loan Amounts4/27/20 (re-posted 4/28/20) IFR #5 – Additional Criterion for Seasonal Employers (85 FR 23917 published April 30, 2020)Calculation of maximum loan amount for seasonal employersEligibility of a seasonal business that was dormant or not fully operating as of Feb. 15, 20204/28/20 IFR #6 – on Disbursements (85 FR 26321 published May 4, 2020)DisbursementsCan a borrower take multiple draws and delay the start of the 8-week periodBy when must a lender electronically submit an SBA Form 1502 indicating that loan funds have been disbursed4/30/20 IFR #7 on Corporate Groups and Non-Bank and Non-Insured Depository Institution Lenders (85 FR 26324 published May 4, 2020)Can a single corporate group receive unlimited PPP loansNon-Bank and Non-Insured Depository Institution LendersCan a non-bank lender or non-insured depository institution be approved to be a lender in the PPP if it has originated, maintained, or serviced, but not performed, all three of these functions for more than $50 million in business loans or other commercial financial receivables during a 12-month period in the past 36 months?Can a non-bank lender that does not meet the $50 million threshold in the first IFR for originating, maintaining, and servicing loans or receivables apply to be a lender in the PPP?5/1/20 Guidance on Whole Loan Sales of PPP Loans5/08/20 IFR # 8 (85 FR 27287 published May 8, 2020) Nondiscrimination and Additional Eligibility Criteria Are recipients of PPP loans entitled to exemptions on the grounds provided in Federal nondiscrimination laws for sex specific admissions practices, sex specific domestic violence shelters, coreligionist housing, or Indian tribal preferences in connection with adoption or foster care practices?Do student workers count when determining the number of employees for PPP loan eligibility?5/10/20 IFR #9 (85 FR 29845 published May 19, 2020) Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Request5/13/20 IFR #10 (85 FR 29842 published May 19, 2020) Paycheck Protection Program – Loan IncreasesAuthorizes all PPP lenders to increase existing PPP loans to partnerships or seasonal employers to include appropriate amounts to cover partner compensation in accordance with the interim final rule posted on April 14, 2020 [IFR #3], or to permit the seasonal employer to calculate its maximum loan amount using the alternative criterion posted on April 28, 2020 [IFR #5].Loan Increases: If a partnership received a PPP loan that did not include any compensation for its partners, can the loan amount be increased to include partner compensation?If a seasonal employer received a PPP loan before the alternative criterion for determining the maximum loan amount for seasonal employers became available, can the loan amount be increased based on a revised calculation using the alternative criterion?Disbursements and 1502 Reporting on Increased PPP LoansIf a borrower’s PPP loan has already been fully disbursed, can the lender make an additional disbursement for the increased loan proceeds?How do lenders report disbursements on PPP loans that are increased and does the increase in the loan delay the timeframe to report the loan on the SBA Form 1502?5/14/20 IFR #11 (85 FR 29847 published May 19, 2020) Eligibility of Certain Electric CooperativesAn electric cooperative that is exempt from federal income taxation under section 501(c)(12) of the Code will be considered to be “a business entity organized for profit” under 13 CFR 121.105(a)(1). As a result, such electric cooperatives are eligible PPP borrowers, as long as other eligibility requirements are met.5/18/20 IFR #12 Treatment of Entities with Foreign AffiliatesThe generally applicable 500-employee size standard is subject to the application of SBA’s affiliation rules, as well as numerous other eligibility requirements. See, e.g., 13 C.F.R. 120.110 (listing 18 types of ineligible businesses);Reference in SBA guidance to employees whose principal place of residence is in the United States is relevant to a PPP applicant’s calculation of payroll for purposes of determining the PPP loan amount and to the calculation of loan forgiveness. [IFR #2, FAQ #44]An applicant is eligible for a PPP loan only if it meets all applicable eligibility criteria. If an applicant, together with its domestic and foreign affiliates, does not meet the 500-employee or other applicable PPP size standard, it is not eligible for a PPP loan5/20/20 IFR #13 Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan and Lender Reporting5/22/20 IFR #14 Paycheck Protection Program – Requirements – Loan ForgivenessWhat is the general process to obtain loan forgiveness?Payroll Costs Eligible for Loan ForgivenessWhen must payroll costs be incurred and/or paid to be eligible for forgiveness?Are salary, wages, or commission payments to furloughed employees; bonuses; or hazard pay during the covered period eligible for loan forgiveness?Are there caps on the amount of loan forgiveness available for owner-employees and self-employed individuals’ own payroll compensation?Nonpayroll Costs Eligible for Loan ForgivenessAre advance payments of interest on mortgage obligations eligible for loan forgiveness?Reductions to Loan Forgiveness AmountWill a borrower’s loan forgiveness amount be reduced if the borrower laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer?What effect does a reduction in a borrower’s number of full-time equivalent (FTE) employees have on the loan forgiveness amount?What does “full-time equivalent employee” mean?How should a borrower calculate its number of full-time equivalent (FTE) employees?What effect does a borrower’s reduction in employees’ salary or wages have on the loan forgiveness amount?How should borrowers seeking loan forgiveness account for the reduction based on a reduction in the number of employees (Section 1106(d)(2)) relative to the reduction relating to salary and wages (Section 1106(d)(3))?If a borrower restores reductions made to employee salaries and wages or FTE employees by not later than June 30, 2020, can the borrower avoid a reduction in its loan forgiveness amount?Will a borrower’s loan forgiveness amount be reduced if an employee is fired for cause, voluntarily resigns, or voluntarily requests a schedule reduction?Documentation RequirementsWhat must borrowers submit for forgiveness of their PPP loans?5/22/20 IFR #15 Interim Final Rule on Loan Review Procedures and Related Borrower ResponsibilitiesSBA Reviews of Individual PPP LoansWill SBA review individual PPP loans?What borrower representations and statements will SBA review?When will SBA undertake a loan review?Will I have the opportunity to respond to SBA’s questions in a review?If SBA determines that a borrower is ineligible for a PPP loan, can the loan be forgiven?May a borrower appeal SBA’s determination that the borrower is ineligible for a PPP loan or ineligible for the loan amount or the loan forgiveness amount claimed by the borrower?The Loan Forgiveness Process for LendersWhat should a lender review?What is the timeline for the lender’s decision on a loan forgiveness application?What should a lender do if it receives notice that SBA is reviewing a loan?Lender FeesIs the lender eligible for a processing fee if SBA determines that a borrower is ineligible?Are lender processing fees subject to clawback if SBA determines that a borrower is ineligible?Are lender processing fees subject to clawback if a lender has not fulfilled its obligations under PPP regulations?6/5/2020 IFR #16, Eligibility of Certain Telephone Cooperatives6/11/2020 IFR #17, HYPERLINK "" Paycheck Protection Program – Revisions to First Interim Final RuleTo reflect changes based on PPP Flexibility Act of 2020 signed into law June 5Updates definition of “covered period” from February 15, 2020 and extends to December 31, 2020Maturity Date for PPP loans:Loans made prior to 6/5/2020, 2 yearsLoans made on or after 6/5/2020, 5 years – date determined when SBA assigns a loan numberDeferral Period (when applicant must begin paying P&I on PPP loan)Must submit loan forgiveness app within 10 months after loan forgiveness periodLoan forgiveness covered period = 24-week period beginning on the date PPP loan is disbursedIf forgiveness app not submitted, must pay P&IAllow borrowers with forgiven loans to defer payroll taxes, effectively overruling a prior IRS decision to the contrary Expand the safe harbor for rehiring employees by allowing that the forgiveness will not be affected by a reduction in employees if the borrower is able to document an inability to rehire individuals, to hire similarly qualified employees, or to return to the same level of business activity as it was operating at before February 15, 20206/12/2020 NEW – Revised application forms Revised Borrower Form >Revised Lender Form >6/12/2020, IFR #18, Additional Revisions to First Interim Final RuleAdjusts eligibility requirements related to any 20% or more owner with felony convictions: Applicant /Owner with 20% or more equity ineligible if: Currently incarcerated, on probation or paroleSubject to indictment, criminal information, arraignment, or any other means through which formal charges brought in any jurisdiction ORConvicted of felony involving fraud, bribery, embezzlement, false statement in loan application or application for federal assistance WITHIN past 5 years, OROther felony WITHIN the last year 6/16/2020 Updated PPP Loan Forgiveness Application and NEW EZ FormEZ Forgiveness Application >EZ Forgiveness Application instructions >Full Forgiveness Application >Full Forgiveness Application instructions >6/17/2020 IFR #19, Revisions to the Third and Sixth Interim Final RulesUpdates language in original IFR #3 to reflect the Flexibility Act’s definition of or alteration to PPP parameters/requirementsUse of Proceeds: [Sec 1102]Extends covered period through 12/31/2020 (from 6/30/2020)Strikes language in IFR #3 referring to “maturity of two years” and replaces with “PPP’s maturity of two years for PPP loans made before June 5, 2020 unless the borrower and lender mutually agree to extend the maturity of such loans to five years, or PPP’s maturity of five years for PPP loans made on or after June 5 …”Updates language on restrictions of use of proceeds to reflect Act’s lowering of percentage of proceeds that must be used for payroll costs from 75 to 60% Loan Forgiveness: [Sec 1106]Updates: What amounts eligible for forgiveness? To reflect longer “covered period” and reduced percentage required to be used on payroll expensesEmployees compensation forgiveness amounts limited to:For 24 weeks, maximum of $46,154 per individual + covered benefitsFor 8 weeks, maximum of $15,385 per individual + covered benefitsOwner compensation forgiveness amounts, based on 2019 net profit, limited to:For 8-week covered period, 8 weeks’ worth of 2019 net profit up to $15,385 For 24-week covered period, 2.5 months’ worth of 2019 net profit up to $20,833Limits apply per owner in total across all businessesExcludes qualified sick leave equivalent amount when credits claimed under FFCRAOther eligible payments remainChanges to IFR #6Removes all references to 8-week covered period, making it read simply ‘covered period’ to reflect change made to section 1106 6/22/2020, IFR #20, Revisions to Loan Forgiveness and SBA Loan Review ProceduresNAGGL’s summary: 6/24/2020, IFR #21, Additional Eligibility Revisions to First Interim Final RuleRemoves additional eligibility restrictions for PPP applicants with criminal historiesAdjusts: Applicant ineligible if any 20% or more owner of equity in applicant Presently incarcerated for any felony Subject to pending criminal charges for a felony offense Probation or parole commenced within last 5 years for felony involving fraud, bribery, embezzlement, or false statement on application for federal assistance in last 5 years – or commenced for any other felony in last year6/24/2020 NEW – Revised application forms HYPERLINK "" Revised Borrower Form >Revised Lender Form >6/25/2020, IFR #22, Certain Eligible Payroll Costs(Fishing Boat Owners)What payroll costs can be included on application submitted by fishing boat owners with crewmembers regarded as independent contractors or otherwise self-employed for federal tax purposesAdministrator/Secretary determined crewmembers in this situation analogous to joint venture or partnershipTo harmonize IFR re partnerships and IFR re independent contractors –Provides that a fishing boat owner may include compensation reported on Box 5 of Form 1099-MISC and paid to a crewmember described in Section 3121(b)(20) as a payroll cost in its PPP loan applicationAddresses a fishing boat owner’s eligibility to obtain loan forgiveness of payroll costs paid to a crewmember who has obtained his or her own PPP loan6/26/2020, Additional Guidance – How to Calculate Loan AmountsNew question #10 on calculations for new self-employed individuals & revised questions 1, 2, 4, 5, 6, and 7 to reflect PPPFA7/1/2020, Hill passes bill (S.4116) to extend PPP to 8/8; signed by the President on 7/4/2020. Read NAGGL’s press release >7/04/2020, President signs S. 4116 into law extending PPP to August 87/06/2020, SBA/Treasury release loan-level data on PPPDetails at link >7/7/2020, SBA releases Notice 5000-20035, Extension of Authority to Guarantee PPP LoansExtends the authority of PPP-only lenders to make loans under the program through 8/8/20207/13/2020, SBA releases Notice 5000-20036, Updated Paycheck Protection Program Processing Fee Payment and 1502 Reporting ProcessUpdates Notice 5000-20028 (5/21/1010) regarding the reporting process for PPP loans and SBA’s payment of the loan processing fee. Per this notice, the first monthly PPP 1502 report is due on or before July 15, however, for this month only, SBA will allow a 2-day grace period. 7/23/2020, SBA releases Notice 5000-20038, Procedures of Lender Submission of Paycheck Protection Program Loan Forgiveness Decisions to SBA and SBA Forgiveness Loan ReviewsSummarizes the guidance related to Paycheck Protection Program (PPP) loan forgiveness and loan reviews as provided previously in various Interim Final Rules (IFRs), FAQs, and other PPP guidance documentsSBA will begin accepting lender forgiveness submissions on August 10, 2020 through a newly created secure Software as a Service (SaaS) platform called the PPP Forgiveness PlatformIndicates that lenders will have options for submitting forgiveness requests for PPP loans in their portfoliosRead NAGGL’s full release >10/02/20/20, SBA releases SBA issues Notice 5000-20057, Paycheck Protection Program Loans and Changes of Ownership (effective 10/2/2020). This long-awaited notice provides a detailed definition of the types of transactions that SBA considers to be “changes of ownership” in situations where the borrower has a PPP loan. It also sets out the requirements that apply to a lender’s approval of such transactions, including those situations where SBA’s prior approval is required. Read NAGGL’s Summary > FAQsTreasury site >14/3/20Is the lender required to replicate every borrower’s calculation?24/6/20Are small business concerns required to have 500 or fewer employees to be eligible?34/6/20Does my business have to qualify as a small business concern?44/6/20Are lenders required to make an independent determination on affiliation?54/6/20Are borrowers required to apply SBA’s affiliation rules?64/6/20Affiliation and minority stakeholders74/6/20Annual salary cap of $100,000 exclude employee benefits84/6/20Do PPP loans cover paid sick leave?94/6/20Seasonal business eligibility period to be “in operation”104/6/20Professional Employer Organizations (PEOs)114/6/20May lenders accept signatures from a single individual authorized to sign on behalf of borrower?124/6/20Felony criminals 5 years134/6/20Lenders use their own online portals and electronic forms144/6/20Time period to determine number of employees and payroll costs to calculate maximum loan amount154/6/20Independent contractors included in payroll costs (also below)164/6/20Accounting for federal taxes when determining payroll costs174/6/20Filing or approving loan applications based on guidance that is now changed184/6/20New account collection – beneficial ownership information - fintechs FinCen194/8/20Promissory note204/8/20When does the 8-week period begin?214/13/20Do lenders need an SBA Authorization?224/13/20Non-bank lender enrollment234/13/20$10 million cap and affiliation rules for franchises244/13/20$10 million cap and affiliation rules for hotels and restaurants254/13/2020% or greater owner satisfy lender’s beneficial ownership information under Bank Secrecy Act264/14/20Standards of Conduct Committee274/14/20Statement of No Objection284/14/20Lender submit loan to SBA before reviewing borrower documentation and calculation of payroll294/15/20Scanned copies and E-signatures or E-consents304/17/20Sell PPP loan into the secondary market314/23/20Businesses owned by large companies with adequate sources of liquidity [see also #43]324/26/20Does the cost of a housing stipend or allowance provided to an employee as part of compensation count as payroll?334/26/20Is there existing guidance to help Applicants and lenders determine whether an individual employee’s principal place of residence is in the US? IRS regs 26 CFR § 1.121-1(b)(2)344/26/20Are agricultural producers, farmers, and ranchers eligible?354/26/20Are agricultural and other forms of cooperatives eligible?364/26/20To determine borrower eligibility under the 500 employee or other threshold, must a borrower count all employees or only full-time equivalent FTE employees?374/28/20Do businesses owned by private companies with adequate sources of liquidity to support the business’ ongoing operations qualify for a PPP loan?384/29/20Change of ownership394/29/20Will SBA review individual PPP loan files?405/03/20Will a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer? 415/03/20Can a seasonal employer that elects to use a 12-week period between May 1, 2019 and September 15, 2019 to calculate its maximum PPP loan amount under the interim final rule issued by Treasury on April 27, 2020, make all the required certifications on the Borrower Application Form?425/03/20Do nonprofit hospitals exempt from taxation under section 115 of the Internal Revenue Code qualify as “nonprofit organizations” under section 1102 of the CARES Act? 435/05/20FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?445/05/20How do SBA’s affiliation rules at 13 C.F.R. 121.301(f) apply with regard to counting the employees of foreign and U.S. affiliates? 455/06/20Is an employer that repays its PPP loan by the safe harbor deadline (May 14, 2020) eligible for the Employee Retention Credit? 465/13/20How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request475/13/20An SBA interim final rule posted on May 8, 2020 provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification concerning the necessity of the loan request in good faith. Is it possible for a borrower to obtain an extension of the May 14, 2020 repayment date? 485/19/20What is the deadline for lenders to complete the initial SBA Form 1502 reporting process???FN 455/27/20Treasury updated FAQ date: only change = new footnote 19 relating to question 45 to incorporate a change made in IFR # 13.? The footnote indicates that the answer to that question was amended to extend the safe harbor for borrowers to repay their loans from May 14 to May 20.? 496/25/20What is the maturity date of a PPP loan? PPP loan receiving SBA loan # on or after June 5, 2020 = 5-year maturity. If SBA loan # before June 5, 2020, loan = 2-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.508/11/20What effect does the payment or nonpayment of fees of an agent or otherthird party have on SBA’s guarantee of a PPP loan or SBA’s payment of fees to lenders? The payment or nonpayment of fees of an agent or other third party is not material to SBA’s guarantee of a PPP loan or to SBA’s payment of fees to lenders. More >518/11/20Do payments required for the provision of group health care benefits,including insurance premiums, include vision and dental benefits? Yes.5210/7/20Are lenders and borrowers required to modify promissory notes usedfor PPP loans to reflect the extended deferral period? SBA does notrequire a formal modification to the promissory note. A modification of a promissory note to reflect the required statutory deferral period under the Flexibility Act will have no effect on the SBA’s guarantee of a PPP loan.FAQs on Forgiveness(August 4) ?SBA releases a new?separate?FAQ document,?Frequently Asked Questions (FAQs) on PPP Loan Forgiveness. The 10-page document divides the questions by topic:?General Loan Forgiveness?(3 FAQs);?Loan Forgiveness Payroll Costs?(8 FAQs);?Loan Forgiveness Nonpayroll Costs?(7 FAQs); and,?Loan Forgiveness Reductions?(5 FAQs). ................
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