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[Update: An updated version of this article was published on June 12, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).
Continue Reading Paycheck Protection Program Flexibility Act: Major Changes to the PPP

*This post was updated on July 10, 2020.

Below please find a link to the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
Continue Reading Paycheck Protection Program: Loan Forgiveness Estimator Workbook

On May 15, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued the Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The Loan Forgiveness Application includes a loan forgiveness calculation form and related Schedule A worksheet as well as an optional PPP borrower demographic information form.

Highlights of what we believe to be material new guidance or clarification of existing guidance regarding PPP loan forgiveness are as follows:
Continue Reading Paycheck Protection Program: Key Features of the Loan Forgiveness Application

On May 13, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued an updated Frequently Asked Questions fact sheet (FAQ)[1], which provides interpretative guidance on the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).[2]
Continue Reading Paycheck Protection Program: SBA Issues Further Guidance on its Review of the Economic Uncertainty Certification made by PPP Borrowers

On April 28, 2020, U.S. Department of Treasury (Treasury) Secretary Steven T. Mnuchin and U.S. Small Business Administration (SBA) administrator Jovita Carranza issued a Joint Statement stating that a “review” will be conducted for businesses seeking loan forgiveness for loans in excess of $2 million under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  Treasury Secretary Mnuchin and SBA administrator Carranza added that “regulatory guidance implementing this procedure will be forthcoming.”
Continue Reading The SBA and U.S. Treasury Announce Full “Review” of Businesses Receiving PPP Loans Greater than $2 Million

On April 24, 2020, the U.S. President signed into law the Paycheck Protection Program and Health Care Enhancement Act (PPP Enhancement Act), which appropriates an additional $321 billion for the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The $321 billion infusion under the PPP Enhancement Act replenishes the PPP after the program utilized the entire $349 billion commitment that was originally authorized under the CARES Act.  Of the $321 billion, the SBA is obligated to set aside and guarantee $30 billion for (i) insured depository institutions with consolidated assets between $10 billion and $50 billion and (ii) credit unions with consolidated assets between $10 billion and $50 billion, and another $30 billion for (i) community financial institutions, (ii) insured depository institutions with consolidated assets of less than $10 billion and (iii) credit unions with consolidated assets of less than $10 billion.
Continue Reading Enactment of the Paycheck Protection Program And Healthcare Enhancement Act and Further Interpretive Guidance on The Economic Uncertainty Certification And PPP Eligibility

The Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) guarantees loans from qualified lenders to small businesses impacted by the COVID-19 pandemic so that those businesses can keep workers employed.  In the Third Interim Final Rule issued on April 20, 2020 (see 85 Fed. Reg. 21747), the SBA cleared the way for members of Federal Reserve Banks (“FRB”) and Federal Home Loan Banks (“FHLB”) to pledge PPP loans to secure borrowings by excluding the FRBs and FHLBs from the pledge requirements typically applicable to SBA 7(a) loan pledges.  The exclusion of such pledges from the otherwise applicable requirements means that the SBA does not have to provide prior consent to such pledges nor will it have to approve the FRB and FHLB loan documents or require a multi-party agreement among SBA, the lender, and others.
Continue Reading Federal Reserve Banks and Federal Home Loan Banks May Accept Pledges of PPP Loans as Collateral

The Paycheck Protection Program (“PPP”), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides federally-guaranteed loans up to a maximum amount of $10 million to qualified businesses, which can be fully forgivable, to encourage businesses to retain employees through the COVID-19 crisis by assisting in the payment of certain operational costs.
Continue Reading Computational Framework for Determining Number of Employees for Eligibility, Qualifying Loan Amount and Forgiveness for a PPP Loan

On April 14, 2020, the U.S. Small Business Administration (SBA) issued its Third Interim Finale Rule[1]   with respect to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Third Interim Final Rule is supplemental to the (i) First Interim Final Rule issued by the SBA on April 2, 2020, (ii) Second Interim Final Rule issued by the SBA on April 4, 2020 and (iii) Applicable Affiliation Rules fact sheet that was issued by the U.S. Department of Treasury (Treasury) on April 4, 2020 and (iv) the Frequently Asked Questions fact sheet (FAQ)[2] issued by the U.S. Department of Treasury (Treasury), which was last updated on April 15, 2020 at the time of this publication.
Continue Reading Further Expansion Of Eligibility And Additional Guidance On The Paycheck Protection Program: The SBA’s April 14, 2020 Interim Final Rule

On April 3, 2020, the U.S. Department of the Treasury (Treasury) and U.S. Small Business Administration (SBA) released further guidance on the affiliation rules applicable to the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, via the Treasury’s Applicable Affiliation Rules fact sheet and the SBA’s Second Interim Final Rule[1] (collectively, the Updated Affiliation Guidance). The Updated Affiliation Guidance is supplemental to the SBA’s First Interim Final Rule that was issued on April 2, 2020.
Continue Reading Updates on the Affiliation Rules Applicable to the Paycheck Protection Program (Title I of the CARES Act)