SBA issues regulations to answer borrower questions around small business loans

Today, the Small Business Administration (SBA) issued its interim final rule implementing sections 1102-1106 of the CARES Act, specifically the sections covering small business loans and loan forgiveness. 

The interim final rule addresses many questions agencies have about the program, including:

  • How do I calculate the maximum amount I can borrow?
  • What qualifies as payroll costs?
  • Is there anything that is expressly excluded from the definition of payroll costs?
  • Do independent contractors count as employees for purposes of PPP loan calculations?
  • What is the interest rate on a PPP loan?
  • What will be the maturity date on a PPP loan?
  • Can I apply for more than one PPP loan?
  • Is the PPP “first-come, first-served?”
  • When will I have to begin paying principal and interest on my PPP loan?
  • Who is eligible to make PPP loans?
  • Can PPP loans be sold into the secondary market?

A copy of the regulations can be found on the SBA website.

This interim final rule applies to applications submitted under the PPP through June 30, 2020, or until funds made available for this purpose are exhausted. Note that while the rule is effective immediately, the SBA will be taking public comments for 30 days after the date of publication in the Federal Register. 

Please feel free to share with the 4A’s any and all experiences you have in working with the SBA and your local lender in securing and receiving one of these PPP loans—the good and the bad. We would like to aggregate comments to provide the SBA feedback on what works, what doesn’t work, and what could work better.