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Treasury Releases Interim Final Rule on Paycheck Protection Program Loans Under CARES Act

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This evening, the Secretary of the Treasury published, via a link on the Treasury website, an Interim Final Rule refining Treasury’s position on the PPP Loan Program. A copy of the Interim Final Rule is here, https://home.treasury.gov/system/files/136/PPP–IFRN%20FINAL.pdf, and we expect it to be published in the Federal Register imminently.

            Some highlights for the Small Business Community include:

  • Treasury has announced a 1% rate for PPP loans, despite the CARES Act’s 4% interest limit, and the Treasury’s earlier, informal guidance suggesting that loans would be available at a rate of .5%.
  • Treasury has provided a more detailed procedure for calculating the maximum amount of loan your business may be eligible to take.
  • Treasury has clarified the definition of “payroll costs” for purposes of calculating loan eligibility.
  • Treasury is clarifying, as expected, that funds will be distributed on a first-come-first-served basis, meaning that it is imperative that you get your PPP loan application in as soon as possible.
  • Treasury has confirmed that, to be eligible for forgiveness, 75% of the loan amount must be used for eligible payroll expenses in the eight weeks after the loan is received. Treasury will be issuing further guidelines about forgiveness.
  • Treasury is clarifying that agent fees will be permitted for those who assist borrowers, with limitations of .25-1 percent depending on the amount of the loan. Agent fees will be paid by lenders out of the fees that lenders get from SBA. Agents cannot otherwise be paid by the borrower or with PPP loan proceeds.

Wadleigh’s COVID-19 Response Team will go over this interim final rule, among other things, during the upcoming webinar: “Small Business and the Federal Response to COVID-19, which will be offered from 11am-1pm on Monday, April 6, 2020.”