May 6, 2021

Volume XI, Number 126

Advertisement

May 06, 2021

Subscribe to Latest Legal News and Analysis

May 05, 2021

Subscribe to Latest Legal News and Analysis

May 04, 2021

Subscribe to Latest Legal News and Analysis

May 03, 2021

Subscribe to Latest Legal News and Analysis

SBA Issues Additional Interim Final Rule for PPP Loan Forgiveness and Loan Review Procedures

Earlier this week, the Small Business Administration (SBA) issued Interim Final Rule – Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule. This Interim Final Rule included additional guidance relating to loan forgiveness of Paycheck Protection Program (PPP) loans, including the following:

Advertisement
  • Allows a borrower to file before the end of the applicable covered period if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness
    • If there are reductions of salaries or wages in excess of 25 percent during the applicable covered period, the borrower must account for the excess reduction through the end of the applicable covered period
      • Safe harbor to restore salaries and wages by date of application remain
  • Clarifies that deferral of interest and principal ends if the SBA determines that the loan is not eligible for forgiveness (in whole or in part)
    • Requires payment of principal and interest
    • Lender is required to notify the borrower of the date of the first payment
  • Limits forgiveness amount available for owner-employees and self-employed individuals' own payroll compensation.
    • For borrowers who use a 24-week covered period, forgiveness for owner-employees’ payroll compensation is capped at the lower of 2.5 months’ worth of 2019 compensation or $20,833
  • Extends exemption from forgiveness reduction arising from a reduction in the number of FTEs due to compliance requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the CDC, HHS or OSHA to state or local government shutdown orders that are based on such guidance
© 2021 Varnum LLPNational Law Review, Volume X, Number 177
Advertisement
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

About this Author

John Arendshorst, Varnum Law Firm, Grand Rapids, Employee Benefits Attorney
Partner

John is a member of the firm’s Employee Benefits Team. He counsels employee benefit plan sponsors with respect to compliance with ERISA and IRS requirements for 401(k) plans, ESOPs and other defined contribution plans, defined benefit plans, and deferred compensation arrangements. John also advises clients on employee benefits issues in the context of corporate transactions, including qualified plan compliance issues, change-in-control agreements, continuation of health coverage, and golden parachute payments under Section 280G. John is experienced in negotiating and...

616-336-6560
Mary Kay Shaver, public/private Corporate finance attorney, Varnum
Partner

Mary Kay has a diverse practice focusing on public finance, corporate finance and creditors' rights issues. In the area of municipal finance, she advises clients on tax-exempt financing issues, establishing special taxing districts, election procedures and "blue sky" law issues, and acts as bond counsel, underwriter's counsel, bank's counsel and issuer's counsel in various tax-exempt and taxable bond transactions. These financings include general obligation (limited and unlimited tax) bonds, revenue bonds, capital improvement bonds, special assessment bonds, tax...

616/336-6755
Advertisement
Advertisement