Business Loan Program Changes and PPP First-Draw Loan Terms as Amended by Economic Aid Act

On January 6, 2021, the Treasury Department released an interim final rule discussing changes to the Business Loan Program and the Paycheck Protection Program (PPP) as amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) signed into law on December 27, 2020. The interim final rule covers a variety of topics, primarily summarizing changes made to the PPP loan program in the text of the Economic Aid Act and restating the regulations issued pursuant to the CARES Act and Paycheck Protection Program Flexibility Act.

To read the full text of this Duane Morris Alert, which outlines the key takeaways from the interim final rule and provides a list of the changes that will affect both PPP borrowers and PPP lenders following passage of the Economic Aid Act, please visit the firm website.

December 2020 COVID-19 Relief Bill

On December 22, 2020, the United States Congress passed an omnibus spending bill (the December relief bill) that included significant revisions and additions to the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), and previously amended by the Paycheck Protection Program Flexibility Act (PPP Flexibility Act). President Trump signed the bill on December 27, 2020.

Duane Morris has published two Alerts on the December relief bill.

For businesses of 300 or fewer employees, there will be an opportunity to receive a second PPP loan, provided that certain other criteria are met. The first Alert, “Second PPP Loans Available for Certain Businesses; Changes to PPP Loan Terms and Conditions,” summarizes the criteria for the “second-draw” loans available for certain businesses.

The second Alert, “Shuttered Venue Operator Grants,” covers economic opportunities for businesses impacted by COVID-19, including Shuttered Venue Operator Grants for live venue operators, entertainment businesses, arts and cultural organizations and others listed below that have been severely impacted by COVID-19 and related government and industry restrictions.

Small Business Administration Releases New FAQ on Loan Forgiveness Review

On December 9, 2020, the Small Business Administration (SBA) added Question 53 to its Frequently Asked Questions (FAQs) document. The new question provides further insight into the SBA’s Paycheck Protection Program (PPP) loan forgiveness review process, especially for borrowers with PPP loans of at least $2 million and new Forms 3509 and 3510, and expands on the good-faith certification discussed in Question 46.

To read the full text of this Duane Morris Alert, which summarizes the key points from the update to the FAQs, please visit the firm website.

Small Business Administration Releases New Interim Final Rule on PPP Loan Forgiveness

On October 8, 2020, the Small Business Administration (SBA) released a new interim final rule detailing additional revisions to the Paycheck Protection Program (PPP) loan forgiveness process and loan review procedures. In addition, the SBA released Question 52 to its Frequently Asked Questions (FAQs) document on October 7, 2020, which addresses the deferral period for borrower payments of principal, interest and fees.

To read the full text of this Duane Morris Alert, which summarizes the key points from the interim final rule and the update to the FAQs, please visit the firm website.

Small Business Administration Releases Procedural Notice for Businesses Undergoing Changes in Ownership

On October 2, 2020, the Small Business Administration (SBA) released a procedural notice that details the steps that Paycheck Protection Program (PPP) loan borrowers and lenders must take when a borrower is engaging in a transaction in which a change in ownership will occur.

To read the full text of this Duane Morris Alert, which summarizes the key points from the notice and the actions that a PPP loan borrower should take (and a purchaser or investor should ensure the borrower takes) in an M&A transaction, please visit the firm website.

Small Business Administration Releases Guidance on the Appeals Process for Paycheck Protection Program Loans

On August 11, 2020, the Treasury Department and Small Business Administration (SBA) released an interim final rule that details the appeals process for Paycheck Protection Program (PPP) loan borrowers for SBA loan review decisions regarding eligibility and/or forgiveness of a PPP loan. The interim final rule builds upon prior guidance released by the SBA on the review process for lenders and the SBA of PPP loans.

To read the full text of this Duane Morris Alert, please visit the firm website.

Small Business Administration Releases Revised Eligibility Rules for Paycheck Protection Program

On June 24, 2020, the Treasury Department and Small Business Administration released an interim final rule updating eligibility criteria for Paycheck Protection Program (PPP) loans made under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and the Paycheck Protection Program Flexibility Act.

The June 24 interim final rule loosens the eligibility criteria that applied to owners of 20 percent or more of a PPP loan borrower’s equity, specifically concerning the criminal histories of such owners. In addition, the June 24 interim final rule confirms certain other eligibility criteria that will remain in place.

To read the full text of this Duane Morris Alert, please visit the firm website.