The SBA has published its Interim Final Rule on Section 1102 and 1106 of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) regarding the Paycheck Protection Program (“PPP”).
Key Points in the Interim Final Rule:
- Applications should be submitted to your Lender ASAP since it is first come first serve until money runs out. The total amount appropriated for the PPP is $349,000,000,000. The last day to apply for a PPP loan is June 30, 2020 provided funds are still available.
- Currently the Affiliation Rules have not been waived but more guidance from SBA is imminent.
- Amounts not forgiven will accrue interest at a rate of one percent payable over two (2) years. The first payment is deferred for 6 months but interest still accrues.
- The regulations provide no guidance on whether the first $100,000 of an employees salary can be included in forgiveness, though it can be included in calculating the amount of the loan.
- Independent Contractors are NOT included in the definition of Payroll Costs.
- Qualified sick and family leave wages for which a credit is allowed under CARES Act may not be included in loan amount.
- If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will be subject to additional liability such as charges for fraud.
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If you need any assistance in completing the Application, please contact the Garfunkel Wild attorney with whom you regularly work.