January 19, 2021

Volume XI, Number 19

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January 18, 2021

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SBA Releases Interim Final Rule Supplementing Existing Rules for Paycheck Protection Program

The Small Business Administration (the “SBA”) released additional guidance today (the “Interim Rule”) on the Paycheck Protection Program (“PPP”). The Interim Rule provides additional guidance for sole proprietors applying for the PPP, as well as additional guidance on eligibility.

Guidance for Sole Proprietors: The Interim Rule enumerates specific items that sole proprietors need to provide a PPP Lender when seeking a loan.

Forgiveness: The SBA clarified that sole proprietors will need to provide the following information to their PPP Lender to substantiate the forgiveness amount:

  • Form 941;

  • State quarterly wage unemployment insurance tax reporting forms or equivalent payroll processor records that best correspond to the 8 week period (with evidence of any retirement and health insurance contributions);

  • Business rent;

  • Business mortgage interest payments on real or personal property; and

  • Business utility payments.

Eligibility: The SBA clarified that:

  • Eligible businesses owned by directors or shareholders (of less than 30% equity interest) of a PPP Lender may apply for a PPP loan. Officers and key employees of a PPP Lender may obtain a PPP loan only from a different PPP Lender than the one they are associated with.

  • Those engaged in legal gambling are eligible for a PPP loan if (a) legal gaming revenue (net of payouts) didn’t exceed $1 million in 2019, and (b) legal gaming revenue (net of payouts) comprised less than 50% of the business’s total revenue in 2019.

A link to the full Interim Rule can be found here.

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© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 106
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About this Author

Phil Feigen of the Polsinelli Law Firm Corporate Transaction Attorney, in Washington DC
Office Managing Partner

Phil Feigen brings a unique perspective to providing general corporate advice, as well as complex business counsel to clients in ever-changing regulatory environments.  For more than 20 years, Phil has been providing guidance with respect to Small Business Investment Companies and other Small Business Administrative regulations, federal and state banking laws and federal securities laws. 

Phil focuses on helping clients through the SBIC licensing process so that they may realize the benefits of the program and increase the amount of investment...

202-626-8330
Sara C. Ainsworth Securities & Corporate Finance Attorney Polsinelli Washington, D.C.
Associate

As an associate in the Securities & Corporate Finance practice, clients rely on Sara Ainsworth to work with Polsinelli’s team of attorneys to analyze each transaction matter to develop a strategic approach to representation based on the client’s immediate and long-term business and operational goals.

Working closely with seasoned Polsinelli attorneys in the Securities & Corporate Finance practice, Sara helps deliver a range of legal services during the life cycle of the client’s business—from selecting the appropriate choice of entity through to exit strategy.  Her practice...

202.772.8495
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