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SMALL BUSINESS ADMINISTRATION published separately, and SBA intends www.sba.gov/tools/local-assistance/ to issue a consolidated rule governing districtoffices. 13 CFR Parts 113, 120, and 121 all aspects of loan forgiveness and the SUPPLEMENTARY INFORMATION: [Docket No. SBA–2021–0001] loan review process as well. This interim final rule is intended to govern I. Background Information RIN 3245–AH62 new PPP loans made under the On March 13, 2020, President Trump Economic Aid Act, as well as DEPARTMENT OF THE TREASURY declared the ongoing Coronavirus applications for loan forgiveness on Disease 2019 (COVID–19) pandemic of RIN 1505–AC74 existing PPP loans where the loan sufficient severity and magnitude to forgiveness payment has not been warrant an emergency declaration for all Business Loan Program Temporary remitted, and should not be construed states, territories, and the District of Changes; Paycheck Protection to alter or affect the requirements Columbia. With the COVID–19 Program as Amended by Economic applicable to PPP loans closed prior to emergency, many small businesses Aid Act its enactment, unless the provisions nationwide continue to experience AGENCY: U.S. Small Business apply retroactively consistent with economic hardship as a direct result of Administration; Department of the specific applicability provisions of the the Federal, State, and local public Treasury. Economic Aid Act as identified in this health measures that continue to be rule. In addition, in this interim final ACTION: Interim final rule. taken to minimize the public’s exposure rule, Treasury exercises its authority to the virus. In addition, based on the SUMMARY: On April 2, 2020, the U.S. under section 1109 of the CARES Act to advice of public health officials, other Small Business Administration (SBA) allow borrowers of first draw PPP loans voluntary measures continue to be posted an interim final rule announcing to use 2019 or 2020 to calculate their observed, resulting in a decrease in the implementation of sections 1102 maximum loan amount. economic activity as the public avoids and 1106 of the Coronavirus Aid, Relief, DATES: malls, retail stores, and other and Economic Security Act (CARES Effective date: Unless otherwise businesses. Act). Section 1102 of the CARES Act specified in this interim final rule, the On March 27, 2020, the President temporarily adds a new program, titled provisions of this interim final rule are signed the Coronavirus Aid, Relief, and the ‘‘Paycheck Protection Program,’’ to effective January 12, 2021. Economic Security Act (the CARES Act the SBA’s 7(a) Loan Program. Section Applicability date: This interim final or the Act) (Pub. L. 116–136) to provide 1106 of the CARES Act provides for rule applies to loan applications, emergency assistance and health care forgiveness of up to the full principal including requests for increases, and response for individuals, families, and amount of qualifying loans guaranteed applications for loan forgiveness businesses affected by the coronavirus under the Paycheck Protection Program submitted under the Paycheck pandemic. The Small Business (PPP). The PPP is intended to provide Protection Program following enactment Administration (SBA) received funding economic relief to small businesses of the Economic Aid Act. This interim and authority through the Act to modify nationwide adversely impacted by the final rule also applies to loan existing loan programs and establish a Coronavirus Disease 2019 (COVID–19). forgiveness applications submitted new loan program to assist small Subsequently, SBA published twenty- under the Paycheck Protection Program businesses nationwide adversely three interim final rules providing before enactment of the Economic Aid impacted by the COVID–19 emergency. additional guidance on the PPP (some of Act where SBA has not remitted the Section 1102 of the CARES Act which were jointly issued with the forgiveness payment. temporarily permitted SBA to guarantee Department of the Treasury) and Comment date: Comments must be 100 percent of 7(a) loans under a new Treasury published one interim final received on or before February 16, 2021. program titled the ‘‘Paycheck Protection rule. On December 27, 2020, the ADDRESSES: You may submit comments, Program,’’ pursuant to section 7(a)(36) Economic Aid to Hard-Hit Small identified by number SBA–2021–0001 of the Small Business Act (15 U.S.C. Businesses, Nonprofits, and Venues Act through the Federal eRulemaking Portal: 636(a)(36)). Section 1106 of the CARES (Economic Aid Act) became law. The http://www.regulations.gov. Follow the Act provided for forgiveness of up to the Economic Aid Act extends the authority instructions for submitting comments. full principal amount of qualifying to make PPP loans through March 31, SBA will post all comments on loans guaranteed under the Paycheck 2021 and revises certain PPP www.regulations.gov. If you wish to Protection Program. A more detailed requirements. This interim final rule submit confidential business discussion of sections 1102 and 1106 of incorporates the Economic Aid Act information (CBI) as defined in the User the Act is found in section III. amendments required to be Notice at www.regulations.gov, please On April 24, 2020, the President implemented by regulation within 10 send an email to [email protected]. All signed the Paycheck Protection Program days of enactment. For ease of borrower other comments must be submitted and Health Care Enhancement Act (Pub. and lender reference, this interim final through the Federal eRulemaking Portal L. 116–139), which provided additional rule also consolidates the interim final described above. Highlight the funding and authority for the PPP. On rules (and important guidance) issued to information that you consider to be CBI June 5, 2020, the President signed the date governing borrower eligibility, and explain why you believe SBA Paycheck Protection Program Flexibility lender eligibility, and PPP application should hold this information as Act of 2020 (Flexibility Act) (Pub. L. and origination requirements for new confidential. SBA will review the 116–142), which changed key PPP loans, as well as provides general information and make the final provisions of the Paycheck Protection rules relating to loan increases and loan determination whether it will publish Program, including provisions relating forgiveness. This rule is not intended to the information. to the maturity of PPP loans, the deferral substantively alter or affect PPP rules FOR FURTHER INFORMATION CONTACT: Call of PPP loan payments, and the that were not amended by the Economic Center Representative at 833–572–0502, forgiveness of PPP loans. Section 3(d) of Aid Act. Additional rules related to or the local SBA Field Office; the list of the Flexibility Act provided that the second draw PPP loans will be offices can be found at https:// amendments relating to PPP loan

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forgiveness and extension of the deferral 85 FR 29847 (posted on May 14, 2020 criteria—the maximum interest rate, period for PPP loans were effective as if and published on May 19, 2020); 85 FR maximum loan amount, and other included in the CARES Act, which 30835 (posted on May 18, 2020 and specified terms—that are ‘‘consistent,’’ meant that they were retroactive to published on May 21, 2020); 85 FR to ‘‘the maximum extent practicable,’’ March 27, 2020. Section 2 of the 31357 (posted on May 20, 2020 and with comparable terms in paragraph 36 Flexibility Act provided that the published on May 26, 2020); 85 FR of section 7(a) of the Small Business Act amendment relating to the extension of 35550 (posted on June 5, 2020 and (15 U.S.C. 636(a)). See section the maturity date for PPP loans became published on June 11, 2020); 85 FR 1109(d)(2). effective on the date of enactment (June 36308 (posted on June 11, 2020 and In this rulemaking, Treasury is 5, 2020). Under the Flexibility Act, the published on June 16, 2020); 85 FR extension of the maturity date for PPP 36717 (posted on June 12, 2020 and addressing the needs of new PPP loans was applicable to PPP loans made published on June 18, 2020); 85 FR borrowers by allowing all new on or after that date, and lenders and 36997 (posted on June 17, 2020 and borrowers to use 2019 or 2020 for borrowers were able to mutually agree published on June 19, 2020); 85 FR purposes of calculating their maximum to modify PPP loans made before such 38301 (posted on June 24, 2020 and loan amount. Section 1102 of the date to reflect the longer maturity. On published on June 26, 2020); and 85 FR CARES Act states that borrowers are to July 4, 2020, Public Law 116–147 39066 (posted on June 25, 2020 and calculate their maximum loan amount extended the authority for SBA to published on June 30, 2020). This rule by using ‘‘payroll costs incurred during guarantee PPP loans to August 8, 2020. should be interpreted consistently with the 1-year period before the date on On December 27, 2020, the Economic the sets of Frequently Asked Questions which the loan is made . . . .’’ For PPP Aid to Hard-Hit Small Businesses, (FAQs) regarding the PPP that are loans made in 2020, most borrowers Nonprofits, and Venues Act (Economic posted on SBA’s and Treasury’s used 2019. The Economic Aid Act did Aid Act) (Pub. L. 116–260) was enacted, websites and the interim final rules not change this language for borrowers which reauthorizes lending under the posted separately providing guidance on that are not farmers and ranchers and PPP through March 31, 2021, and second draw PPP loans and the would require most new PPP borrowers among other things, modifies provisions consolidated guidance on loan who obtain a loan in 2021 to use 2020 related to making PPP loans and forgiveness and the loan review process; as their base period. Using authority forgiveness of PPP loans, and authorizes however, the Economic Aid Act granted by section 1109 of the CARES second draw PPP loans under new overrides any conflicting guidance in Act, this rulemaking allows new section 7(a)(37) of the Small Business the FAQs, and SBA will be revising the borrowers to choose 2019 or 2020 as the Act for PPP borrowers that previously FAQs to fully conform to the Economic base period, thereby ensuring that they received a PPP loan (rules for second Aid Act as quickly as feasible. Most of this document restates are able to obtain funding on terms draw loans will be published commensurate with existing PPP separately). The Economic Aid Act also existing regulatory provisions to provide lenders and new PPP borrowers a single borrowers. Separately, section 313 of the redesignates section 1106 of the CARES Economic Aid Act states that farmers Act as section 7A and transfers that regulation to consult on borrower eligibility, lender eligibility, and loan and ranchers are to calculate their section to the Small Business Act, to maximum loan amount using 2019 as appear after section 7 of the Small application and origination requirements, as well as general rules on their base period. This rulemaking Business Act.1 increases and loan forgiveness for PPP allows farmers and ranchers to elect In addition to incorporating the loans. To enhance the readability of this either 2019 or 2020 as their base period, changes to PPP requirements made by document, SBA has not reproduced the in order to ensure that they can obtain the Economic Aid Act, this interim final policy and legal justifications for funding on terms commensurate with rule consolidates and restates the existing regulatory provisions restated those available to other new PPP following interim final rules: 85 FR here, except to the extent that those borrowers. 20811 (posted on April 2, 2020 and justifications may be helpful to the published in the Federal Register on As required by section 1109(d)(2)(B) borrower or lender. However, those April 15, 2020); 85 FR 20817 (posted on of the CARES Act, Treasury has justifications from the original interim determined that providing new PPP April 3, 2020 and published on April final rules are incorporated by reference 15, 2020); 85 FR 21747 (posted on April borrowers with flexibility in choosing a here. base period is consistent, to the 14, 2020 and published on April 20, In addition, section 1109(b) of the ‘‘maximum extent practicable,’’ with the 2020); 85 FR 23450 (posted on April 24, CARES Act authorizes Treasury to terms applicable to existing PPP 2020 and published on April 28, 2020); establish criteria for certain other 85 FR 23917 (posted on April 27, 2020 lenders to participate in the PPP. The borrowers. This enhanced flexibility and published on April 30, 2020); 85 FR SBA is required to administer the will help ensure that new PPP 26321 (posted on April 28, 2020 and program that Treasury establishes under borrowers are treated even-handedly published on May 4, 2020); 85 FR 26324 section 1109 of the Act, with guidance and do not see their permissible loan (posted on April 30, 2020 and published from Treasury. The CARES Act amounts reduced due to financial on May 4, 2020); 85 FR 27827 (posted authorizes Treasury to issue regulations distress experienced in 2020. Other than on May 5, 2020 and published on May and guidance to implement section these adjustments, the terms and 8, 2020); 85 FR 29845 (posted on May 1109, including regulations that requirements applicable to PPP loans 8, 2020 and published on May 19, establish ‘‘terms and conditions’’ for under this rule are identical to the terms 2020); 85 FR 29842 (posted on May 13, PPP loans. See section 1109(d)(2). The and requirements applicable to all other 2020 and published on May 19, 2020); terms and conditions established by PPP loans. As a result, a PPP borrower Treasury under section 1109 are not that elects to use the flexibility in 1 Because section 1106 of the CARES Act is now required to be identical to those selecting a base period under this codified as section 7A of the Small Business Act, interim final rule may follow the same any reference to section 1106 of the CARES Act in provided elsewhere. Rather, the CARES the rules that are being restated herein will refer to Act allows Treasury to set terms and processes and procedures applicable to section 7A. conditions pertaining to certain other PPP loans.

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II. Comments and Immediate Effective provisions of the PPP related to 8. Are lenders required to use a promissory Date eligibility of applicants for PPP loans, note provided by SBA or may they use which lenders are authorized to make their own? This interim final rule is being issued 9. Are lenders required to use a separate without advance notice and public PPP loans, the process for making PPP SBA Authorization document to issue comment because section 303 of the loans, loan increases, and loan PPP loans? Economic Aid Act authorizes SBA to forgiveness, as revised by the Economic 10. By when must a lender electronically issue regulations to implement the Aid Act. Additional rules related to submit an SBA Form 1502 indicating Economic Aid Act without regard to second draw PPP loans will be that PPP loan funds have been notice requirements. In addition, this published separately. While this interim disbursed? 11. How do lenders report disbursements rule is being issued to allow for final rule fully implements the Economic Aid Act’s changes to loan on PPP loans that are approved for loan immediate implementation of this increases due to the Economic Aid Act? program. The intent of both the CARES forgiveness, SBA also intends to issue a D. What do both borrowers and lenders need Act and the Economic Aid Act is that consolidated rule governing all aspects to know and do? SBA provides relief to America’s small of loan forgiveness and loan review as 1. What are the loan terms and conditions? businesses expeditiously. Congress well to provide a single reference point 2. Do lenders have to apply the ‘‘credit reauthorized PPP because of the current for lenders and borrowers. elsewhere test’’? economic conditions affecting small 3. Are there any fee waivers? Table of Contents 4. Who pays the fee to an agent who businesses and intended for the loans to A. General provides assistance in connection with a be made quickly. The last day to apply PPP loan? B. What do borrowers need to know and do? for and receive a PPP loan is March 31, 5. Can a borrower take multiple draws from 1. What businesses, organizations, and 2021. Given the short duration of this a PPP loan and thereby delay the start of individuals are eligible? program, and the urgent need to issue the covered period? 2. What businesses, organizations, and loans quickly, the Administrator in 6. If a partnership received a PPP loan that individuals are ineligible? consultation with the Secretary has did not include any compensation for its 3. Affiliation Rules Generally partners, can the loan amount be determined that it is impractical and not 4. I Have Determined That I Am Eligible. in the public interest to provide a 30- increased to include partner How much can I borrow? compensation? day delayed effective date. An 5. What is the interest rate on a PPP loan? 7. If a seasonal employer received a PPP immediate effective date will give small 6. What will be the maturity date on a PPP loan before December 27, 2020, can the businesses the maximum amount of loan? loan amount be increased based on a time to apply for loans and lenders the 7. Can I apply for more than one First Draw revised calculation of the maximum loan maximum amount of time to process PPP Loan? amount? applications before the program ends. 8. Can I use e-signatures or e-consents if a 8. Which other PPP borrowers can reapply This good cause justification also borrower has multiple owners? or request an increase in their PPP loan supports waiver of the 60-day delayed 9. When will I have to begin paying amount? effective date for major rules under the principal and interest on my PPP loan? 9. If a borrower’s PPP loan has already 10. What forms do I need and how do I been fully disbursed, can the lender Congressional Review Act at 5 U.S.C. submit an application for a PPP loan? make an additional disbursement for the 808(2). Although this interim final rule 11. How can PPP loans be used? increased loan proceeds? is effective immediately, comments are 12. What certifications need to be made? 10. Are recipients of PPP loans entitled to solicited from interested members of the 13. Limited Safe Harbor With Respect to exemptions on the grounds provided in public on all aspects of the interim final Certification Concerning Need for PPP Federal nondiscrimination laws for sex- rule, including section III. These Loan Request specific admissions practices, sex- comments must be submitted on or 14. Can my PPP loan be forgiven in whole specific domestic violence shelters, before February 16, 2021. The SBA will or in part? coreligionist housing, or Indian tribal consider these comments and the need 15. Do independent contractors count as preferences in connection with adoption or foster care practices? for making any revisions as a result of employees for purposes of PPP loan forgiveness? these comments. A. General 16. For loans made prior to December 27, III. Paycheck Protection Program as 2020, what additional documentation SBA is authorized to guarantee loans Amended by Economic Aid Act must a borrower submit when the under the PPP through March 31, 2021. President of the United States, Vice Congress has authorized a total program Overview President of the United States, the head level of $806,450,000,000 to provide The CARES Act was enacted to of an Executive department, or a Member guaranteed loans under this temporary provide immediate assistance to of Congress, or the spouse of any of the 7(a) program under sections 7(a)(36) preceding, directly or indirectly holds a individuals, families, and businesses (PPP loans or First Draw PPP Loans) and controlling interest in the borrower? affected by the COVID–19 emergency. C. What do lenders need to know and do? 7(a)(37) (Second Draw PPP Loans) of the Among the provisions contained in the 1. Who is eligible to make PPP loans? Small Business Act, a portion of which CARES Act are provisions authorizing 2. Do lenders have to register in SAM.gov is available for new First Draw and SBA to temporarily guarantee loans to make PPP loans? Second Draw PPP Loans. Lenders have under a new 7(a) loan program titled the 3. What do lenders have to do in terms of delegated authority to make PPP loans. ‘‘Paycheck Protection Program.’’ Loans loan underwriting? SBA will allow lenders to rely on guaranteed under the Paycheck 4. Can lenders rely on borrower certifications of the borrower in order to Protection Program (PPP) will be 100 documentation for loan forgiveness? determine eligibility of the borrower percent guaranteed by SBA, and the full 5. What fees will lenders be paid? and use of loan proceeds and to rely on principal amount of the loans may 6. Can PPP loans be sold into the specified documents provided by the secondary market? qualify for loan forgiveness. The 7. Do the requirements for loan pledges borrower to determine qualifying loan Economic Aid Act reauthorizes lending under 13 CFR 120.434 apply to PPP amount and eligibility for loan under the PPP through March 31, 2021, loans pledged for borrowings from a forgiveness. Lenders must comply with and revises certain PPP requirements. Federal Reserve Bank (FRB) or advances the applicable lender obligations set The following outlines the key by a Federal Home Loan Bank (FHLB)? forth in this interim final rule, but will

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be held harmless for borrowers’ failure eligible destination marketing with its domestic and foreign affiliates, to comply with program criteria and organization,6 that employs no more does not meet the 500-employee, 300- will not be subject to any enforcement than 300 employees; employee,9 or other applicable PPP size action or penalty relating to loan • a news organization that is majority standard is therefore ineligible for a PPP origination or forgiveness of the PPP owned or controlled by a NAICS code loan. Under no circumstances may PPP loan if the lender acts in good faith 511110 or 5151 business or a nonprofit funds be used to support non-U.S. relating to the origination or forgiveness public broadcasting entity with a trade workers or operations. of the PPP loan and satisfies all other or business under NAICS 511110 or c. I have income from self- applicable Federal, State, local, and 5151, that employs no more than 500 employment and file a Form 1040, other statutory or regulatory employees (or, if applicable, the size Schedule C. Am I eligible for a PPP requirements (as provided in section standard in number of employees Loan? 10 7A(h) of the Small Business Act, as established by SBA in 13 CFR 121.201 You are eligible for a PPP loan if: (i) amended). Remedies for violations of for your industry) per location; or You were in operation on February 15, PPP requirements or fraud are • another type of entity specifically 2020; (ii) you are an individual with separately addressed in this interim provided for by PPP rules (as described self-employment income (such as an final rule. The program requirements of below); and independent contractor or a sole the PPP identified in this rule ii. you were in operation on February proprietor); (iii) your principal place of temporarily supersede any conflicting 15, 2020, and either had employees for residence is in the United States; and Loan Program Requirement (as defined whom you paid salaries and payroll (iv) you filed or will file a Form 1040 in 13 CFR 120.10). taxes or paid independent contractors, Schedule C for 2019 or meet the as reported on a Form 1099–MISC or requirements below. However, if you are B. What do borrowers need to know you were an eligible self-employed a partner in a partnership, you may not and do? individual, independent contractor, or submit a separate PPP loan application 1. What businesses, organizations, and sole proprietorship with no employees. for yourself as a self-employed individuals are eligible? You must submit documentation individual. Instead, the self- sufficient to establish eligibility and to employment income of general active 23 a. Am I eligible? demonstrate the qualifying payroll partners may be reported as a payroll You are eligible for a PPP loan if: amount, which may include, as cost, up to $100,000 on an annualized i. You, together with any affiliates (if applicable, payroll records, payroll tax 4 basis, as prorated for the period during applicable), are: filings, Form 1099–MISC, Schedule C or • A small business concern under the which the payments are made or the F, income and expenses from a sole applicable revenue-based size standard obligation to make the payments is proprietorship, or bank records. established by SBA in 13 CFR 121.201 incurred on a PPP loan application filed b. Are employees of foreign affiliates by or on behalf of the partnership. for your industry or under the SBA included for purposes of determining 5 Partnerships are eligible for PPP loans alternative size standard; whether a PPP borrower has more than • an independent contractor, eligible under the CARES Act, as amended by 500 employees (or 300 employees, if self-employed individual, or sole the Economic Aid Act, and the applicable)? 7 Administrator has determined, in proprietor; Yes. SBA’s affiliation regulations • a business concern, a tax-exempt consultation with the Secretary of the provide that to determine a concern’s nonprofit organization described in size, employees of the concern ‘‘and all section 501(c)(3) of the Internal Revenue franchise identifier code by the Administration; (3) of its domestic and foreign affiliates’’ are any business concern that receives financial Code (IRC), a tax-exempt veterans included. 13 CFR 121.301(f). Therefore, assistance from a company licensed under section organization described in section 301 of the Small Business Investment Act of 1958 to calculate the number of employees of 501(c)(19) of the IRC, a Tribal business (15 U.S.C. 681); and (4)(a) any business concern an entity for purposes of determining concern described in section 31(b)(2)(C) (including any station which broadcasts pursuant to eligibility for the PPP, an entity must a license granted by the Federal Communications of the Small Business Act, and you include all employees of its domestic Commission under title III of the Communications employ no more than the greater of 500 Act of 1934 (47 U.S.C. 301 et seq.) without regard and foreign affiliates, except in those employees or, if applicable, the size for whether such a station is a concern as defined limited circumstances where the in section 121.105 of title 13, Code of Federal standard in number of employees affiliation rules expressly do not apply Regulations, or any successor thereto) that employs established by SBA in 13 CFR 121.201; to the entity.8 Any entity that, together not more than 500 employees, or the size standard • a housing cooperative, an eligible established by the Administrator for the North section 501(c)(6) organization, or an American Industry Classification System code 6 See subsections 1.j., 1.k., and 1.m. for additional applicable to the business concern, per physical information on the eligibility of housing location of such business concern and is majority 2 See interim final rule on Second Draw PPP cooperatives, section 501(c)(6) organizations, and owned or controlled by a business concern that is Loans for eligibility criteria for Second Draw PPP destination marketing organizations. The applicable assigned a North American Industry Classification Loans, which is being published separately. size standard for these entities is not more than 300 System code beginning with 511110 or 5151; or (b) 3 This subsection was originally published at 85 employees. any nonprofit organization that is assigned a North FR 20811, subsection III.2.a. (April 15, 2020), as 7 This subsection was originally published at 85 American Industry Classification System code amended by 85 FR 36308 (June 16, 2020), 85 FR FR 30835, section III.1. (May 21, 2020) and has been beginning with 5151. SBA also applies affiliation 36717 (June 18, 2020), and 85 FR 38301 (June 26, modified for readability. Housing cooperatives, exceptions to certain categories of entities. 13 CFR 2020), and has been modified to reflect subsequent section 501(c)(6) organizations, and destination 121.103(b). rules or guidance and the Economic Aid Act. marketing organizations, added by the Economic 9 For housing cooperatives, section 501(c)(6) 4 See section 3 regarding the applicability of Aid Act, must have no more than 300 employees organizations, and destination marketing affiliation rules at 13 CFR 121.103 and 121.301 to to be eligible for PPP loans. organizations, the applicable size standard is not PPP loans. 8 Paragraph 7(a)(36)(D)(iv) of the Small Business more than 300 employees. See subsections 1.j. and 5 Under SBA’s alternative size standard, a Act (15 U.S.C. 636(a)(36)(D)(iv)), as added by the 1.m. For the applicable size standard for entities business concern may qualify as a small business CARES Act and amended by the Economic Aid Act, eligible to apply for Second Draw PPP Loans, see concern if it, together with any affiliates: (1) Has a waives SBA’s affiliation rules for (1) any business the interim final rule on Second Draw PPP Loans maximum tangible net worth of not more than $15 concern with not more than 500 employees that, as that is being published separately. million; and (2) the average net income after of the date on which the loan is disbursed, is 10 This subsection was originally published at 85 Federal income taxes (excluding any carry-over assigned a North American Industry Classification FR 21747, subsection III.1.a. (April 20, 2020) and losses) for the two full fiscal years before the date System code beginning with 72; (2) any business has been modified to reflect subsequent interim of application is not more than $5 million. concern operating as a franchise that is assigned a final rules or guidance and the Economic Aid Act.

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Treasury (Secretary), that limiting a process as any similarly situated loan if it: (1) Is majority owned or partnership and its partners (and an LLC customer or account holder of the controlled by a business concern that is filing taxes as a partnership) to one PPP lender. Favoritism by the lender in assigned a NAICS code beginning with loan is necessary to help ensure that as processing time or prioritization of the 511110 or 5151 or, with respect to a many eligible borrowers as possible director’s or equity holder’s PPP public broadcasting entity (as defined in obtain PPP loans before the statutory application is prohibited. Lenders section 397(11) of the Communications deadline of March 31, 2021. This should comply with all other applicable Act of 1934 (47 U.S.C. 397(11))), has a limitation will allow lenders to more state and federal regulations concerning trade or business that falls under such quickly process applications and lower loans to associates of the lender. a code; and (2) makes a good faith the burdens of applying for Lenders should also consult their own certification that proceeds of the loan partnerships/partners. The internal policies concerning lending to will be used to support expenses at the Administrator has further determined individuals or entities associated with component of the organization that that permitting partners to apply as self- the lender. produces or distributes locally focused employed individuals would create The foregoing paragraph does not or emergency information. See section 3 unnecessary confusion regarding which apply to a director or owner who is also for the applicability of SBA’s affiliation entity, the partner or the partnership, an officer or key employee of the PPP rules to news organizations. applies for partner and LLC member Lender. Officers and key employees of g. Industry-Specific Eligibility Issues income, and would generate loan a PPP Lender may obtain a PPP Loan i. Is a hospital owned by proceeds use coordination and from a different lender, but not from the governmental entities eligible for a PPP allocation issues. Rent, mortgage PPP Lender with which they are loan? 15 interest, utilities, other debt service, associated. SBA also reminds Lenders Notwithstanding 13 CFR 120.110(j), a operations expenditures, property that the ‘‘Authorized Lender Official’’ hospital that is otherwise eligible to damage costs, supplier costs, and for each PPP Loan is subject to the receive a PPP loan as a business concern worker protection expenditures are limitations described in the PPP Lender or nonprofit organization (described in generally incurred at the partnership Application Form (SBA Form 2484), section 501(c)(3) of the Internal Revenue level, not partner level, so it is most which states in relevant part: ‘‘Neither Code of 1986 and exempt from taxation natural to provide the funds for these the undersigned Authorized Lender under section 501(a) of such Code) shall expenses to the partnership, not Official, nor such individual’s spouse or not be rendered ineligible for a PPP loan individual partners. In addition, you children, has a financial interest in the due to ownership by a state or local should be aware that participation in Applicant [Borrower].’’ government if the hospital receives less the PPP may affect your eligibility for e. If a seasonal business was dormant than 50% of its funding from state or state-administered unemployment or not fully operating as of February 15, local government sources, exclusive of compensation or unemployment 2020, is it still eligible? 13 Medicaid. assistance programs, including the Yes, in evaluating eligibility, a ii. Are businesses that receive revenue programs authorized by Title II, Subtitle seasonal business will be considered to from legal gaming eligible for a PPP A of the CARES Act, or CARES Act have been in operation as of February Loan? 16 Employee Retention Credits. On June 15, 2020, if the business was in A business that is otherwise eligible 26, 2020, SBA issued additional operation for any 12-week period for a PPP Loan is not rendered ineligible guidance for those individuals with self- between February 15, 2019 and due to its receipt of legal gaming employment income who: (i) Were not February 15, 2020. This approach aligns revenues, and 13 CFR 120.110(g) is in operation in 2019 but who were in the eligibility criteria for seasonal inapplicable to PPP loans. Businesses operation on February 15, 2020, and (ii) businesses being in operation with the that received illegal gaming revenue filed a Form 1040 Schedule C for 2020. time period for calculation of a seasonal remain categorically ineligible. See ‘‘How To Calculate Maximum Loan employer’s maximum loan amount from iii. Are electric cooperatives that are Amounts—By Business Type,’’ Question exempt from Federal income taxation 11 section 336 of the Economic Aid Act 10 posted on SBA’s website. and makes PPP loans available to under section 501(c)(12) of the Internal d. Are eligible businesses owned by 17 seasonal businesses that operate outside Revenue Code eligible for a PPP loan? directors or shareholders of a PPP of the original, more limited time frame. Yes. An electric cooperative that is lender permitted to apply for a PPP loan f. How does the 500 employee limit exempt from Federal income taxation through the lender with which they are under section 501(c)(12) of the Internal associated? 12 apply to news organizations with more than one physical location? 14 Revenue Code will be considered to be SBA regulations (including 13 CFR ‘‘a business entity organized for profit’’ 120.110 and 120.140) shall not apply to A business concern, or any station which broadcasts pursuant to a license for purposes of 13 CFR 121.105(a)(1). As prohibit an otherwise eligible business a result, such entities are eligible PPP owned (in whole or part) by an outside granted by the Federal Communications Commission under title III of the borrowers, as long as other eligibility director or holder of a less than 30 requirements are met. To be eligible, an percent equity interest in a PPP lender Communications Act of 1934 (47 U.S.C. 301 et seq.), with more than one electric cooperative must satisfy the from obtaining a PPP loan from the PPP employee-based size standard lender on whose board the director physical location that employs not more than 500 employees (or the size established in the CARES Act, SBA’s serves or in which the equity owner employee-based size standard holds an interest, provided that the standard established by the Administrator for the NAICS code eligible business owned by the director 15 This subsection was originally published at 85 or equity holder follows the same applicable to the business concern) per FR 23450, subsection III.2.c. (April 28, 2020) and physical location, is eligible for a PPP has been modified for readability. 11 https://www.sba.gov/sites/default/files/2020- 16 This subsection was originally published at 85 12/How-to-Calculate-Loan-Amounts-508_6-26- 13 This subsection was originally published at 85 FR 23450, subsection III.2.d. (April 28, 2020) and 20.pdf (April 20, 2020). FR 23917, subsection III.4. (April 30, 2020) and has has been modified for readability. 12 This subsection was originally published at 85 been modified to reflect the Economic Aid Act. 17 This subsection was originally published at 85 FR 21747, subsection III.2.a. (April 20, 2020) and 14 This subsection has been added to conform to FR 29847, subsection III.1. (May 19, 2020) and has has been modified for readability. section 317 of the Economic Aid Act. been modified for readability.

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corresponding to its primary industry, if Yes. A public broadcasting entity (as destination marketing organization does higher, or both tests in SBA’s defined in section 397(11) of the not receive more than 15 percent of its ‘‘alternative size standard.’’ 18 Communications Act of 1934 (47 U.S.C. receipts from lobbying activities; (2) the iv. Are telephone cooperatives that 397(11)) that is a nonprofit organization lobbying activities of the destination are exempt from federal income or any organization otherwise subject to marketing organization do not comprise taxation under section 501(c)(12) of the section 511(a)(2)(B) of the Internal more than 15 percent of the total Internal Revenue Code eligible for a PPP Revenue Code of 1986, and employs no activities of the organization; (3) the cost loan? 19 more than 500 employees (or, if of the lobbying activities of the Yes. A telephone cooperative that is applicable, the size standard in number destination marketing organization did exempt from federal income taxation of employees established by SBA in 13 not exceed $1,000,000 during the most under section 501(c)(12) of the Internal CFR 121.201 for the entity’s industry) recent tax year of the destination Revenue Code will be considered to be per location is eligible for a PPP loan if marketing organization that ended prior ‘‘a business entity organized for profit’’ the organization has a trade or business to February 15, 2020; (4) the destination for purposes of 13 CFR 121.105(a)(1). As that is assigned a NAICS code beginning marketing organization employs not a result, such entities are eligible PPP with 511110 or 5151, and makes a good more than 300 employees; and (5) the borrowers, as long as other eligibility faith certification that proceeds of the destination marketing organization: (a) requirements are met. To be eligible, a loan will be used to support expenses at Is described in section 501(c) of the telephone cooperative must satisfy the the component of the organization that Internal Revenue Code and is exempt employee-based size standard produces or distributes locally focused from taxation under section 501(a) of established in the CARES Act, SBA’s or emergency information.23 See such Code; or (b) is a quasi- employee-based size standard subsection B.1.f. for information on how governmental entity or is a political corresponding to its primary industry, if the 500 employee limit applies to news subdivision of a State or local higher, or both tests in SBA’s organizations with more than one government, including any 20 ‘‘alternative size standard.’’ physical location. See section 3 for the instrumentality of those entities.26 v. Are housing cooperatives as applicability of SBA’s affiliation rules to viii. Are 501(c)(6) organizations defined in section 216(b) of the Internal news organizations. 27 21 eligible for PPP loans? Revenue Code eligible for PPP loans? vii. Are destination marketing Yes. Any organization that is Yes. Housing cooperatives (as defined organizations eligible for PPP loans? 24 described in section 501(c)(6) of the in section 216(b) of the Internal Revenue Yes. Under the Economic Aid Act, Internal Revenue Code and that is Code of 1986) that employ not more any destination marketing exempt from taxation under section 25 than 300 employees are eligible to apply organization is eligible to receive a 501(a) of such Code (excluding for PPP loans as long as other eligibility PPP loan as long as other eligibility professional sports leagues and requirements are met. In addition, the requirements are met and if: (1) The organizations with the purpose of provisions applicable to affiliation, promoting or participating in a political described in section 3, apply to housing 23 This subsection provides that an eligible campaign or other activity) shall be cooperatives in the same manner as nonprofit news organization under section 317 of eligible to receive a PPP loan as long as with respect to a small business the Economic Aid Act must have no more than 500 employees. (For those nonprofit news organizations other eligibility requirements are met concern. with more than one physical location, they must vi. Are nonprofit and tax-exempt and if: (1) The organization does not have no more than 500 employees per location.) receive more than 15 percent of its news organizations eligible for PPP This will make PPP loans available to nonprofit loans? 22 news organizations, regardless of whether the receipts from lobbying activities; (2) the organization would be a business concern under lobbying activities of the organization SBA regulations, if the nonprofit news organization do not comprise more than 15 percent 18 Under the alternative size standard, a business satisfies the same general size standard applicable concern, including an electric cooperative, can under the PPP rules to other borrowers that are of the total activities of the organization; qualify for the PPP as a small business concern if, nonprofit or tax-exempt organizations. The (3) the cost of the lobbying activities of as of March 27, 2020: (1) The maximum tangible net Administrator, in consultation with the Secretary, the organization did not exceed worth of the business was not more than $15 has determined this requirement appropriately $1,000,000 during the most recent tax million; and (2) the average net income after implements section 317 of the Economic Aid Act Federal income taxes (excluding any carry-over by making PPP loans available to nonprofit news year of the organization that ended prior losses) of the business for the two full fiscal years organizations on the same terms as other nonprofit to February 15, 2020; and (4) the before the date of the application is not more than organizations that have been made eligible for PPP organization employs not more than 300 $5 million. For an electric cooperative that does not loans. employees. have net income, the cooperative’s savings 24 This subsection has been added to conform to distributed to its owner-members will be section 318 of the Economic Aid Act. 2. What businesses, organizations, and considered its net income. 25 Section 318 of the Economic Aid Act added the 19 individuals are ineligible? This subsection was originally published at 85 following definition to paragraph 7(a)(36)(A) of the FR 35550, subsection III.1. (June 11, 2020) and has Small Business Act (15 U.S.C. 636(a)(36)(A)): ‘‘(xv) a. Could I be ineligible even if I meet been modified for readability. the term ’destination marketing organization’ means the eligibility requirements in section 20 Under the alternative size standard, a business a nonprofit entity that is—(I) an organization 1? 28 concern, including a telephone cooperative, can described in section 501(c) of the Internal Revenue qualify for the PPP as a small business concern if, Code of 1986 and exempt from tax under section as of March 27, 2020: (1) The maximum tangible net 501(a) of such Code; or (II) a State, or a political 26 A destination marketing organization that is a worth of the business was not more than $15 subdivision of a State (including any quasi-governmental entity or is a political million; and (2) the average net income after instrumentality of such entities)—(aa) engaged in subdivision of a State or local government, Federal income taxes (excluding any carry-over marketing and promoting communities and including any instrumentality of those entities, is losses) of the business for the two full fiscal years facilities to businesses and leisure travelers through eligible for a PPP loan notwithstanding the SBA before the date of the application is not more than a range of activities, including—(AA) assisting with regulation at 13 CFR 120.110(j), which states that $5 million. For a telephone cooperative that does the location of meeting and convention sites; (BB) government-owned entities (except for businesses not have net income, the telephone cooperative’s providing travel information on area attractions, owned or controlled by a Native American tribe) are capital credits distributed to its owner-members lodging accommodations, and restaurants; (CC) not eligible for SBA financial assistance. will be considered its net income. providing maps; and (DD) organizing group tours of 27 This subsection has been added to conform to 21 This subsection has been added to conform to local historical, recreational, and cultural section 318 of the Economic Aid Act. section 316 of the Economic Aid Act. attractions; or (bb) that is engaged in, and derives 28 This subsection was originally published at 85 22 This subsection has been added to conform to the majority of the operating budget of the entity FR 20811, subsection III.2.a. (April 15, 2020), as section 317 of the Economic Aid Act. from revenue attributable to, providing live events. Continued

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You are ineligible for a PPP loan if, for securities exchange under section 6 of No. If the applicant or the owner of example: the Securities Exchange Act of 1934 (15 the applicant is the debtor in a i. You are engaged in any activity that U.S.C. 78f) 32 (SBA will not consider bankruptcy proceeding, either at the is illegal under Federal, state, or local whether a news organization that is time it submits the application or at any law; eligible under the conditions described time before the loan is disbursed, the ii. You are a household employer in subsection 1.f. and 1.g.vi. is affiliated applicant is ineligible to receive a PPP (individuals who employ household with an entity, which includes any loan. If the applicant or the owner of the employees such as nannies or entity that owns or controls such news applicant becomes the debtor in a housekeepers); organization, that is an issuer 33); or bankruptcy proceeding after submitting iii. An owner of 20 percent or more ix. Your business has permanently a PPP application but before the loan is of the equity of the applicant is closed.34 disbursed, it is the applicant’s presently incarcerated or, for any felony, b. Are businesses that are generally obligation to notify the lender and presently subject to an indictment, ineligible for 7(a) loans under 13 CFR request cancellation of the application. criminal information, arraignment, or 120.110 eligible for a PPP loan? 35 Failure by the applicant to do so will be other means by which formal criminal Paragraphs (a), (g), and (k), of 13 CFR regarded as a use of PPP funds for charges are brought in any jurisdiction; 120.110 do not apply to PPP loans. For unauthorized purposes. or has been convicted of, pleaded guilty PPP loans, the ineligibility restriction in The Borrower Application Form for or nolo contendere to, or commenced 13 CFR 120.110(n) is superseded by PPP loans (SBA Form 2483), which any form of parole or probation subsection B.2.a.iii. of this interim final reflects this restriction in the form of a (including probation before judgment) rule. Otherwise, a business is not borrower certification, is a loan program for, a felony involving fraud, bribery, eligible for a PPP loan if it is a type of requirement. Lenders may rely on an embezzlement, or a false statement in a business concern (or would be, if the applicant’s representation concerning loan application or an application for entity were a business concern) the applicant’s or an owner of the federal financial assistance within the described in 13 CFR 120.110, except as applicant’s involvement in a bankruptcy last five years or any other felony within permitted by subsections B.1.d and proceeding. the last year; B.1.g of this rule or otherwise permitted d. Is a hedge fund or private equity iv. You, or any business owned or by PPP rules. Businesses that are not firm eligible for a PPP loan? 38 controlled by you or any of your generally eligible for a 7(a) loan under No. Hedge funds and private equity owners, has ever obtained a direct or 13 CFR 120.110 are described further in firms are primarily engaged in guaranteed loan from SBA or any other SBA’s Standard Operating Procedure investment or speculation, and such Federal agency that is currently (SOP) 50 10 6, Part 2, Section A, businesses are therefore ineligible to delinquent or has defaulted within the Chapter 3.36 receive a PPP loan. c. Will I be approved for a PPP loan last seven years and caused a loss to the 3. Affiliation Rules Generally government; if my business is in bankruptcy? 37 v. Your business or organization was a. Are affiliates considered together not in operation on February 15, 32 Added to conform to section 342 of the for purposes of determining 2020; 29 Economic Aid Act, which also added the following eligibility? 39 definitions to paragraph 7(a)(36)(A) of the Small In most cases, a borrower will be vi. You or your business received or Business Act (15 U.S.C. 636(a)(36)(A)): ‘‘(xvi) the will receive a grant under the Shuttered terms ‘exchange’, ‘issuer’, and ‘security’ have the considered together with its affiliates for Venue Operator Grant program under meanings given those terms in section 3(a) of the purposes of determining eligibility for 40 section 324 of the Economic Aid Act; 30 Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).’’ the PPP. Under SBA rules, entities vii. The President, the Vice President, This provision applies to loans made on or after December 27, 2020. 38 This subsection was originally published at 85 the head of an Executive Department, or 33 See section 317 of the Economic Aid Act. FR 23450, subsection III.2.a. (April 28, 2020) and a Member of Congress, or the spouse of 34 This provision prohibits an entity that has gone has been modified for readability. such person as determined under out of business and has no intention of reopening 39 The text of this subsection was originally applicable common law, directly or from receiving a PPP loan. The Administrator, in published at 85 FR 20817 (April 15, 2020). consultation with the Secretary, has determined 40 Paragraph 7(a)(36)(D)(iv) of the Small Business indirectly holds a controlling interest in this provision is necessary to maintain program your business; 31 Act (15 U.S.C. 636(a)(36)(D)(iv), as added by the integrity, prevent abuse, and prevent PPP loans CARES Act and amended by the Economic Aid Act, viii. Your business is an issuer, the being made to businesses that have permanently waives the affiliation rules contained in § 121.103 securities of which are listed on an closed. Preserving funds for businesses in operation for (1) any business concern with not more than 500 exchange registered as a national is necessary because only businesses that are still employees that, as of the date on which the loan in operation will retain employees, which is a is disbursed, is assigned a North American Industry primary purposes of the PPP. PPP was not intended Classification System code beginning with 72; (2) amended by 85 FR 36308 (June 16, 2020), 85 FR to support businesses that have permanently closed. any business concern operating as a franchise that 36717 (June 18, 2020), and 85 FR 38301 (June 26, A borrower that has temporarily closed or is assigned a franchise identifier code by the 2020), and has been modified to conform to temporarily suspended its business but intends to Administration; (3) any business concern that subsequent interim final rules or guidance and the reopen remains eligible for a PPP loan. receives financial assistance from a company Economic Aid Act and for readability. 35 This subsection replaces the subsection licensed under section 301 of the Small Business 29 Added to conform to section 310 of the originally published at 85 FR 20811, subsection Investment Act of 1958 (15 U.S.C. 681); and (4)(a) Economic Aid Act. This provision is effective as if III.2.c. (‘‘How do I determine if I am ineligible’’) any business concern (including any station which included in the CARES Act and applies to any loan (April 15, 2020) and modified to conform to the broadcasts pursuant to a license granted by the made pursuant to section 7(a)(36) of the Small Economic Aid Act. Federal Communications Commission under title III Business Act before, on, or after December 27, 2020, 36 SOP 50 10 6 can be found at https:// of the Communications Act of 1934 (47 U.S.C. 301 including forgiveness of such a loan. www.sba.gov/document/sop-50-10-lender- et seq.) without regard for whether such a station 30 Added to conform to section 310 of the development-company-loan-programs-0. For PPP is a concern as defined in section 121.105 of title Economic Aid Act. This provision applies to PPP loans approved before December 27, 2020, see SOP 13, Code of Federal Regulations, or any successor loans made on or after December 27, 2020. 50 10 5(K), Subpart B, Chapter 2 for ineligible types thereto) that employs not more than 500 employees, 31 Added to conform to section 322 of the of businesses. SOP 50 10 5(K) can be found at or the size standard established by the Economic Aid Act. This provision applies to any https://www.sba.gov/document/sop-50-10-5-lender- Administrator for the North American Industry loan made on or after December 27, 2020. For any development-company-loan-programs. Classification System code applicable to the loan made under section 7(a)(36) to a covered entity 37 This subsection was originally published at 85 business concern, per physical location of such before December 27, 2020, see subsection B.16 of FR 23450, subsection III.4. (April 28, 2020) and has business concern and is majority owned or this interim final rule. been modified for readability. controlled by a business concern that is assigned a

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may be considered affiliates based on nonprofit organizations listed above as set forth in the Second PPP Interim factors including but not limited to were not eligible for SBA Business Loan Final Rule (85 FR 20817). The affiliation stock ownership, overlapping Programs under section 7(a) of the Small rules apply to private equity-owned management,41 and identity of interest. Business Act; only for-profit small businesses in the same manner as any See 13 CFR 121.301(f). business concerns were eligible. The other business subject to outside b. How do SBA’s affiliation rules CARES Act made such nonprofit ownership or control.46 However, in affect my eligibility and apply to me organizations not only eligible for the addition to applying any applicable 42 under the PPP? PPP, but also subjected them to SBA’s affiliation rules, all borrowers should An entity generally is eligible for the affiliation rules. As amended, section carefully review the required PPP if it, combined with its affiliates, (i) 7(a) of the Small Business Act (15 U.S.C. certification on the Paycheck Protection is a small business as defined in section 636(a)) now provides that the provisions 3 of the Small Business Act (15 U.S.C. Program Borrower Application Form applicable to affiliations under 13 CFR (SBA Form 2483) stating that ‘‘[c]urrent 632), (ii)(1) has 500 or fewer 121.103 apply with respect to nonprofit 43 economic uncertainty makes this loan employees or is a business that organizations, housing cooperatives, request necessary to support the operates in a certain industry and meets and veterans organizations in the same applicable SBA employee-based size manner as with respect to small ongoing operations of the Applicant.’’ standards for that industry, if higher, business concerns. However, the e. Does participation in an employee and (2) is a tax-exempt nonprofit detailed affiliation standards contained stock ownership plan (ESOP) trigger organization described in section in § 121.103 currently do not apply to application of the affiliation rules? 47 501(c)(3) of the Internal Revenue Code PPP borrowers, because § 121.103(a)(8) No. For purposes of the PPP, a (IRC), a housing cooperative, a tax- provides that applicants in SBA’s exempt veterans organization described business’s participation in an ESOP (as Business Loan Programs (which include defined in 15 U.S.C. 632(q)(6)) does not in section 501(c)(19) of the IRC, a Tribal the PPP) are subject to the affiliation business concern described in section result in an affiliation between the rules contained in 13 CFR 121.301. business and the ESOP. 31(b)(2)(C) of the Small Business Act, a c. Faith-Based Organizations 44 section 501(c)(6) organization, a This rule exempts otherwise qualified 4. I Have Determined That I Am Eligible. destination marketing organization, or faith-based organizations from the How much can I borrow? 48 any other business concern, or (iii) has SBA’s affiliation rules, including those 500 or fewer employees per location (or set forth in 13 CFR part 121, where the Under the PPP, the maximum loan an applicable SBA employee-based size application of the affiliation rules would amount for First Draw PPP Loans is the standard for that industry, if higher) and substantially burden those lesser of $10 million or an amount that is either majority owned or controlled organizations’ religious exercise. For the you will calculate using a payroll-based by a NAICS code 511110 or 5151 reasons described in 85 FR 20817, the formula authorized by the Act, as business or is a nonprofit public SBA’s affiliation rules, including those explained below.49 PPP loans approved broadcasting entity with a trade or set forth in 13 CFR part 121, do not in 2020 used 2019 or the 1-year before business under NAICS code 511110 or apply to the relationship of any church, 5151. Prior to the CARES Act, the the date on which the loan is made to convention or association of churches, calculate payroll costs for purposes of or other faith-based organization or North American Industry Classification System calculating the maximum loan amount. code beginning with 511110 or 5151; or (b) any entity to any other person, group, Borrowers who apply for PPP loans nonprofit organization that is assigned a North organization, or entity that is based on 2021 and who are not self-employed American Industry Classification System code a sincere religious teaching or belief or beginning with 5151. This interim final rule has no (including sole proprietorships and effect on these statutory waivers, which remain in otherwise constitutes a part of the independent contractors) are also full force and effect. As a result, the affiliation rules exercise of religion. This includes any permitted to use the precise 1-year contained in section 121.301 also do not apply to relationship to a parent or subsidiary these types of entities. In addition, paragraph period before the date on which the loan and other applicable aspects of is made to calculate payroll costs if they 7(a)(36)(D) of the Small Business Act (15 U.S.C. organizational structure or form. A faith- 636(a)(36)(D)), as amended by section 342 of the choose not to use 2019 or 2020. Since based organization seeking loans under Economic Aid Act states that, with respect to a most borrowers will use 2019 or 2020 business concern made eligible under paragraph this program may rely on a reasonable, the rule text refers only to 2019 or 2020 7(a)(36)(D)(iii)(II) or (iv)(IV) (certain news good faith interpretation in determining organizations), the Administrator shall not consider for simplicity and readability. whether any affiliated entity, which for purposes of whether its relationship to any other this subclause shall include any entity that owns or person, group, organization, or entity is 46 However, the CARES Act waives the affiliation controls such business concern, is an issuer. exempt from the affiliation rules under rules if the borrower receives financial assistance 41 In order to help potential borrowers identify this provision, and SBA will not assess, from an SBA-licensed Small Business Investment other businesses with which they may be deemed and will not require participating Company (SBIC) in any amount. This includes any to be affiliated under the common management type of financing listed in 13 CFR 107.50, such as standard, the Borrower Application Form, SBA lenders to assess, the reasonableness of loans, debt with equity features, equity, and Form 2483, released on April 2, 2020, requires the faith-based organization’s guarantees. Affiliation is waived even if the applicants to list other businesses with which they determination. borrower has investment from other non-SBIC have common management (including under a investors. management agreement). The information supplied d. Do the SBA affiliation rules 47 This subsection was originally published at 85 by the applicant in response to that information prohibit a portfolio company of a request should be used by applicants as they assess private equity fund from being eligible FR 23450, section III.3. (April 28, 2020) and has been modified for readability. whether they have affiliates that should be included for a PPP loan? 45 in their number of employees reported on SBA 48 This subsection was originally published at 85 Form 2483. Borrowers must apply the affiliation FR 20811, subsection III.2.d. (April 15, 2020) and 42 The text of this subsection was originally rules that appear in 13 CFR 121.301(f), has been modified to conform to additional interim published at 85 FR 20817 (April 15, 2020) and has final rules or guidance and the Economic Aid Act. been modified to conform to the Economic Aid Act. 44 The text of this subsection was originally 49 See subsection 4.d. for maximum loan amount 43 For housing cooperatives, section 501(c)(6) published at 85 FR 20817 (April 15, 2020) and has applicable to certain farmers and ranchers. For the organizations, and destination marketing been modified for readability. maximum loan amount for Second Draw PPP organizations, the applicable size standard is not 45 This subsection was originally published at 85 Loans, see the the interim final rule on Second more than 300 employees. FR 23450, subsection III.2.b. (April 28, 2020). Draw PPP Loans that is being published separately.

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a. How do I calculate the maximum excess of an annual salary of your PPP loan application to amount I can borrow? 50 $100,000: $1,200,000 substantiate the applied-for PPP loan The following methodology, which is Average monthly qualifying payroll: amount and a 2019 or 2020 (whichever one of the methodologies authorized by $100,000 you used to calculate loan amount) IRS the Act, will be most useful for many Multiply by 2.5 = $250,000 Form 1099–MISC detailing applicants. Add EIDL loan of $10,000 = $260,000 nonemployee compensation received i. Step 1: Aggregate payroll costs Maximum loan amount is $260,000 (box 7), invoice, bank statement, or book (defined in detail below in subsections You must provide your Form 941 (or of record that establishes you are self- 4.g. and 4.h.) from 2019 or 2020 for other tax forms containing similar employed. If using 2020 to calculate employees whose principal place of information) and state quarterly wage loan amount, this is required regardless residence is the United States. unemployment insurance tax reporting of whether you have filed a 2020 tax ii. Step 2: Subtract any compensation forms from each quarter in 2019 or 2020 return with the IRS. You must provide paid to an employee in excess of (whichever you used to calculate loan a 2020 invoice, bank statement, or book $100,000 on an annualized basis, as amount), or equivalent payroll processor of record to establish you were in prorated for the period during which the records, along with evidence of any operation on or around February 15, payments are made or the obligation to retirement and health insurance 2020. make the payments is incurred.51 contributions. A payroll statement or If you have employees, the following iii. Step 3: Calculate average monthly similar documentation from the pay methodology should be used to payroll costs (divide the amount from period that covered February 15, 2020 calculate your maximum loan amount: Step 2 by 12). must be provided to establish you were i. Step 1: Compute 2019 or 2020 iv. Step 4: Multiply the average in operation on February 15, 2020.52 payroll (using the same year for all monthly payroll costs from Step 3 by b. I have income from self- items) by adding the following: 2.5. employment and file a Form 1040, a. Your 2019 or 2020 Form 1040 v. Step 5: Add the outstanding Schedule C, how do I calculate the Schedule C line 31 net profit amount (if you are using 2020 and have not yet amount of an Economic Injury Disaster maximum amount I can borrow and 53 filed a 2020 return, fill it out and Loan (EIDL) made between January 31, what documentation is required? compute the value), up to $100,000 on 2020 and April 3, 2020 that you seek to How you calculate your maximum an annualized basis, as prorated for the refinance. Do not include the amount of loan amount depends upon whether or period during which the payments are any ‘‘advance’’ under an EIDL COVID– not you employ other individuals. If you made or the obligation to make the 19 loan (because it does not have to be have no employees, the following payments is incurred, if this amount is repaid). methodology should be used to over $100,000, reduce it to $100,000, if The examples below illustrate this calculate your maximum loan amount: this amount is less than zero, set this methodology. i. Step 1: Find your 2019 or 2020 IRS Form 1040 Schedule C line 31 net profit amount at zero; i. Example 1—No employees make more amount (if you are using 2020 to b. 2019 or 2020 gross wages and tips than $100,000 calculate payroll costs and have not yet paid to your employees whose principal Annual payroll: $120,000 filed a 2020 return, fill it out and place of residence is in the United Average monthly payroll: $10,000 compute the value). If this amount is States computed using 2019 or 2020 IRS Multiply by 2.5 = $25,000 over $100,000, reduce it to $100,000. If Form 941 Taxable Medicare wages & Maximum loan amount is $25,000 this amount is zero or less, you are not tips (line 5c—column 1) from each ii. Example 2—Some employees make eligible for a PPP loan. quarter plus any pre-tax employee more than $100,000 ii. Step 2: Calculate the average contributions for health insurance or Annual payroll: $1,500,000 monthly net profit amount (divide the other fringe benefits excluded from Subtract compensation amounts in amount from Step 1 by 12). Taxable Medicare wages & tips; subtract excess of an annual salary of iii. Step 3: Multiply the average any amounts paid to any individual $100,000: $1,200,000 monthly net profit amount from Step 2 employee in excess of $100,000 on an Average monthly qualifying payroll: by 2.5. annualized basis, as prorated for the $100,000 iv. Step 4: Add the outstanding period during which the payments are Multiply by 2.5 = $250,000 amount of any Economic Injury Disaster made or the obligation to make the Maximum loan amount is $250,000 Loan (EIDL) made between January 31, payments is incurred and any amounts iii. Example 3—No employees make 2020 and April 3, 2020 that you seek to paid to any employee whose principal more than $100,000, outstanding refinance. Do not include the amount of place of residence is outside the United EIDL loan of $10,000. any advance under an EIDL COVID–19 States; and Annual payroll: $120,000 loan (because it does not have to be c. 2019 or 2020 employer Average monthly payroll: $10,000 repaid). contributions to employee group health, Multiply by 2.5 = $25,000 You must provide the 2019 or 2020 life, disability, vision and dental Add EIDL loan of $10,000 = $35,000 (whichever you used to calculate loan insurance (portion of IRS Form 1040 Maximum loan amount is $35,000 amount) Form 1040 Schedule C with Schedule C line 14 attributable to those iv. Example 4—Some employees make contributions); retirement contributions more than $100,000, outstanding 52 This subsection clarifies the documentation (Form 1040 Schedule C line 19), and EIDL loan of $10,000 that must be submitted with an applicant’s loan state and local taxes assessed on Annual payroll: $1,500,000 application to substantiate the borrower’s payroll employee compensation (primarily costs. This requirement applies to loans made after Subtract compensation amounts in December 27, 2020. For documentation under state laws commonly referred to requirements for PPP loans made before December as the State Unemployment Tax Act or 50 This subsection was originally published at 85 27, 2020, see 85 FR 20811, subsection III.1.e. (April SUTA from state quarterly wage FR 20811, subsection III.2.d. (April 15, 2020) and 15, 2020). reporting forms). has been modified to conform to additional rules or 53 This subsection was originally published at 85 guidance and the Economic Aid Act. FR 21747, subsection III.1.b. (April 20, 2020) and ii. Step 2: Calculate the average 51 See subsection 4.j for treatment of amounts has been modified to conform to additional rules or monthly amount (divide the amount paid to independent contractors. guidance and the Economic Aid Act. from Step 1 by 12).

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iii. Step 3: Multiply the average d. How do farmers and ranchers value), and the sum of Schedule F lines monthly amount from Step 2 by 2.5. calculate the maximum PPP loan 15, 22 and 23, up to $100,000 on an iv. Step 4: Add the outstanding amount? 55 annualized basis, as prorated for the amount of any EIDL made between How you calculate your maximum period during which the payments are January 31, 2020 and April 3, 2020 that loan amount depends upon whether you made or the obligation to make the you seek to refinance. Do not include employ other individuals. If you have payments is incurred, if this amount is the amount of any advance under an no employees, the following over $100,000, reduce it to $100,000, if EIDL COVID–19 loan (because it does methodology should be used to this amount is less than zero, set this not have to be repaid). calculate your maximum loan amount: amount at zero; 56 You must supply your 2019 or 2020 i. Step 1: Find your 2019 or 2020 IRS b. 2019 or 2020 gross wages and tips (whichever you used to calculate loan Form 1040 Schedule F line 9 gross paid to your employees whose principal amount) Form 1040 Schedule C, Form income (if you are using 2020 and you place of residence is in the United 941 (or other tax forms or equivalent have not yet filed a 2020 return, fill it States computed using 2019 or 2020 IRS payroll processor records containing out and compute the value). If this Form 941 Taxable Medicare wages & similar information) and state quarterly amount is over $100,000, reduce it to tips (line 5c—column 1) from each wage unemployment insurance tax $100,000. If this amount is zero or less, quarter plus any pre-tax employee reporting forms from each quarter in you are not eligible for a PPP loan. contributions for health insurance or 2019 or 2020 (whichever you used to ii. Step 2: Divide the amount from other fringe benefits excluded from calculate loan amount) or equivalent Step 1 by 12. Taxable Medicare wages & tips; subtract payroll processor records, along with iii. Step 3: Multiply the average any amounts paid to any individual evidence of any retirement and health monthly gross income amount from employee in excess of $100,000 on an insurance contributions, if applicable. A Step 2 by 2.5. annualized basis, as prorated for the payroll statement or similar iv. Step 4: Add the outstanding period during which the payments are documentation from the pay period that amount of any Economic Injury Disaster made or the obligation to make the covered February 15, 2020 must be Loan (EIDL) made between January 31, payments is incurred and any amounts provided to establish you were in 2020 and ending on April 3, 2020 that paid to any employee whose principal operation on February 15, 2020. you seek to refinance. Do not include place of residence is outside the United c. How does a seasonal employer the amount of any advance under an States; and calculate the maximum PPP loan EIDL COVID–19 loan (because it does c. 2019 or 2020 employer amount? 54 not have to be repaid). contributions for employee group As defined by section 315 of the You must provide the 2019 or 2020 health, life, disability, vision and dental Economic Aid Act, a borrower is a (whichever you used to calculate loan insurance (portion of IRS Form 1040 seasonal employer if it does not operate amount) Form 1040 Schedule F with Schedule F line 15 attributable to those for more than 7 months in any calendar your PPP loan application to contributions), employer contributions year or, during the preceding calendar substantiate the applied-for PPP loan for employee retirement contributions year, it had gross receipts for any 6 amount and a 2019 or 2020 (whichever (Form 1040 Schedule F line 23, and months of that year that were not more you used to calculate loan amount) IRS state and local taxes assessed on than 33.33 percent of the gross receipts Form 1099–MISC detailing employers for employee compensation for the other 6 months of that year. nonemployee compensation received (primarily under state laws commonly Under section 336 of the Economic Aid (box 7), invoice, bank statement, or book referred to as the State Unemployment Act, a seasonal employer must of record that establishes you are self- Tax Act or SUTA from state quarterly determine its maximum loan amount for employed. You must provide a 2020 wage reporting forms). ii. Step 2: Calculate the average purposes of the PPP by using the invoice, bank statement, or book of monthly amount (divide the amount employer’s average total monthly record to establish you were in operation on or around February 15, from Step 1 by 12). payments for payroll for any 12-week iii. Step 3: Multiply the average 2020. period selected by the seasonal monthly amount from Step 2 by 2.5. If you have employees, the following employer beginning February 15, 2019, iv. Step 4: Add the outstanding methodology should be used to and ending February 15, 2020. amount of any EIDL made between calculate your maximum loan amount: January 31, 2020 and April 3, 2020 that 54 i. Step 1: Compute 2019 or 2020 This subsection has been added to conform to you seek to refinance. Do not include section 336 of the Economic Aid Act. Except for payroll (using the same year for all the amount of any advance under an loans made pursuant to section 7(a)(36) of the Small items) by adding the following: EIDL COVID–19 loan (because it does Business Act for which SBA has remitted a loan a. The difference between your 2019 forgiveness payment to the lender before December not have to be repaid). 27, 2020, it is effective as if included in the CARES or 2020 Form 1040 Schedule F line 9 You must supply your 2019 or 2020 Act and applies to any loan made before, on, or gross income amount (if you are using (whichever you used to calculate loan after December 27, 2020, including forgiveness of 2020 and you have not yet filed a 2020 such a loan. Previous guidance issued for seasonal amount) Form 1040 Schedule F, Form employers stated as follows: ‘‘Under section 1102 return, fill it out and compute the 941 (or other tax forms or equivalent of the CARES Act, a seasonal employer may payroll processor records containing determine its maximum loan amount for purposes 55 This subsection has been added to conform to of the PPP by reference to the employer’ average section 313 of the Economic Aid Act. This similar information) and state quarterly total monthly payments for payroll ‘the 12-week provision applies to a farmer or rancher who (1) wage unemployment insurance tax period beginning February 15, 2019, or at the operates as a sole proprietorship, an independent reporting forms from each quarter in election of the eligible [borrower], March 1, 2019, contractor, or is an eligible self-employed 2019 or 2020 (whichever you used to and ending June 30, 2019.’ Under this interim final individual; (2) reports farm income or expenses on rule issued pursuant to section 1109 of the Act, a a Schedule F (or any equivalent successor calculate loan amount) or equivalent seasonal employer may alternatively elect to schedule); and (3) was in business as of February determine its maximum loan amount as the average 15, 2020. This provision is effective as if included 56 Any employee payroll costs should be total monthly payments for payroll during any in the CARES Act and applies to any loan made subtracted from the farmer’s or rancher’s gross consecutive 12-week period between May 1, 2019 before, on, or after December 27, 2020, unless SBA income to avoid double-counting amounts that and September 15, 2019.’’ 85 FR 23917 (April 30, has remitted a loan forgiveness payment to the represent pay to the employees of the farmer or 2020). lender on the PPP loan. rancher.

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payroll processor records, along with (ii) Step 2: Calculate the average owned, directly or indirectly, by a evidence of any retirement and health monthly payroll costs (divide the common parent. insurance contributions, if applicable. A amount from Step 1 by 12). It is the responsibility of an applicant payroll statement or similar (iii) Step 3: Multiply the average for a PPP loan to notify the lender if the documentation from the pay period that monthly payroll costs from Step 2 by applicant has applied for or received covered February 15, 2020 must be 2.5. PPP loans in excess of the amount provided to establish you were in (iv) Step 4: Add any outstanding permitted by this interim final rule and operation on February 15, 2020. amount of any EIDL made between withdraw or request cancellation of any January 31, 2020 and April 3, 2020 that A farmer or rancher who received a pending PPP loan application or you seek to refinance. Do not include PPP loan before December 27, 2020 may approved PPP loan not in compliance the amount of any advance under an request a recalculation of the maximum with the limitation set forth in this rule. EIDL COVID–19 loan (because it does Failure by the applicant to do so will be loan amount based on the formula not have to be repaid). regarded as a use of PPP funds for described above regarding gross income, You must supply 2019 or 2020 unauthorized purposes, and the loan if doing so would result in a larger (whichever you used to calculate loan will not be eligible for forgiveness. A covered loan amount and may receive amount) IRS Form 1065 (including K– lender may rely on an applicant’s an increase in its PPP loan based on the 1s) and other relevant supporting representation concerning the recalculation. documentation if the partnership has applicant’s compliance with this e. How do partnerships calculate the employees, including the 2019 or 2020 limitation. maximum loan amount? (whichever you used to calculate loan The Administrator, in consultation The following methodology should be amount) IRS Form 941 and state with the Secretary, determined that used to calculate the maximum amount quarterly wage unemployment limiting the amount of PPP loans that a that partnerships can borrow: insurance tax reporting form from each single corporate group may receive will quarter (or equivalent payroll processor promote the availability of PPP loans to (i) Step 1: Compute 2019 or 2020 records or IRS Wage and Tax payroll (using the same year for all the largest possible number of Statements) along with records of any borrowers, consistent with the CARES items) by adding (1) net earnings from retirement or health insurance self-employment of individual general Act. The Administrator has concluded contributions. If the partnership has that a limitation of $20,000,000 strikes partners in 2019 or 2020, as reported on employees, a payroll statement or IRS Form 1065 K–1, reduced by section an appropriate balance between broad similar documentation from the pay availability of PPP loans and program 179 expense deduction claimed, period that covered February 15, 2020 unreimbursed partnership expenses resource constraints. must be provided to establish the SBA’s affiliation rules, which relate to claimed, and depletion claimed on oil partnership was in operation and had an applicant’s eligibility for PPP loans, and gas properties, multiplied by employees on that date. If the and any waiver of those rules under the 0.9235,57 that is not more than $100,000 partnership has no employees, an CARES Act, continue to apply per partner; (2) 2019 or 2020 gross invoice, bank statement, or book of independent of this limitation. wages and tips paid to your employees record establishing the partnership was Businesses are subject to this limitation whose principal place of residence is in in operation on February 15, 2020 must even if the businesses are eligible for the the United States, if any, which can be instead be provided. waiver-of-affiliation provision under the computed using 2019 or 2020 IRS Form f. Can a single corporate group receive CARES Act or are otherwise not 941 Taxable Medicare wages and tips 58 unlimited PPP loans? considered to be affiliates under SBA’s (line 5c—column 1) from each quarter No. To preserve the limited resources affiliation rules.60 plus any pre-tax employee contributions available to the PPP program, and in This rule has no effect on lender for health insurance or other fringe light of the previous lapse of PPP obligations required to obtain an SBA benefits excluded from Taxable appropriations and the high demand for guarantee for PPP loans. Medicare wages and tips, subtracting PPP loans, businesses that are part of a g. What qualifies as ‘‘payroll any amounts paid to any individual single corporate group shall in no event costs? ’’ 61 employee in excess of $100,000 and any receive more than $20,000,000 of PPP Payroll costs consist of compensation amounts paid to any employee whose loans in the aggregate.59 For purposes of to employees (whose principal place of principal place of residence is outside this limit, businesses are part of a single residence is the United States) in the the U.S.; (3) 2019 or 2020 employer corporate group if they are majority form of salary, wages, commissions, or contributions for employee group similar compensation; cash tips or the health, life, disability, vision and dental 58 This subsection was originally published at 85 equivalent (based on employer records insurance, if any (portion of IRS Form FR 26324, subsection III.1. (May 4, 2020). of past tips or, in the absence of such 1065 line 19 attributable to those 59 The Administrator has authority to issue ‘‘such rules and regulations as [the Administrator] deems records, a reasonable, good-faith contributions); (4) 2019 or 2020 necessary to carry out the authority vested in [her] employer estimate of such tips); employer contributions to employee by or pursuant to’’ 15 U.S.C. Chapter 14A, payment for vacation, parental, family, retirement plans, if any (IRS Form 1065 including authorities established under section medical, or sick leave; allowance for line 18); and (5) 2019 or 2020 employer 1102 of the CARES Act. Section 1102 provides that the Administrator ‘‘may’’ guarantee loans under the separation or dismissal; payment for the state and local taxes assessed on terms and conditions set forth in section 7(a) of the provision of employee benefits employee compensation, primarily state Small Business Act, and those conditions specify a consisting of group health care or group unemployment insurance tax (from state ‘‘maximum’’—but not a minimum—loan amount. life, disability, vision, or dental quarterly wage reporting forms), if any. See 15 U.S.C. 636(a)(36)(B), (E); see also CARES Act section 1106(k) (authorizing SBA to issue regulations to govern loan forgiveness). To preserve 60 See Section 7(a)(36)(D)(iv) of the Small 57 This treatment follows the computation of self- finite appropriations for PPP loans and ensure Business Act (15 U.S.C. 636(a)(36)(D)(iv), as added employment tax from IRS Form 1040 Schedule SE broad access for eligible borrowers, the by the CARES Act; 13 CFR 121.103(b). Section A line 4 and removes the ‘‘employer’’ share Administrator, in consultation with the Secretary, 61 This subsection was originally published at 85 of self-employment tax, consistent with how payroll has determined that an aggregate limitation on FR 20811, subsection III.2.f. (April 15, 2020) and costs for employees in the partnership are loans to a single corporate group is necessary and has been modified to conform to the Economic Aid determined. appropriate. Act.

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insurance,62 including insurance No, independent contractors have the 7. Can I apply for more than one First premiums, and retirement; payment of ability to apply for a PPP loan on their Draw PPP Loan? 72 state and local taxes assessed on own so they do not count for purposes No. Except as set forth in subsection compensation of employees; and for an of a borrower’s PPP loan calculation.66 D.8, the Administrator, in consultation independent contractor or sole k. Do student workers count when with the Secretary, determined that no proprietor, wages, commissions, determining the number of employees eligible borrower may receive more than income, or net earnings from self- for PPP loan eligibility? 67 one First Draw PPP Loan. This means employment, or similar compensation. that if you apply for a PPP loan you h. Is there anything that is expressly Yes. Student workers generally count should consider applying for the excluded from the definition of payroll as employees, unless (a) the applicant is maximum amount. Any borrower who costs? 63 an institution of higher education, as received a PPP loan in 2020 received a Yes. The Act expressly excludes the defined in the Department of First Draw PPP Loan and is not eligible following: Education’s Federal Work-Study to receive another First Draw PPP Loan, i. Any compensation of an employee regulations, 34 CFR 675.2, and (b) the but may be eligible for a second draw whose principal place of residence is student worker’s services are performed PPP loan.73 outside of the United States; as part of a Federal Work-Study Program 8. Can I use e-signatures or e-consents ii. The compensation of an individual (as defined in those regulations 68) or a if a borrower has multiple owners? 74 employee in excess of $100,000 on an substantially similar program of a State annualized basis, as prorated for the or political subdivision thereof. Yes, e-signature or e-consents can be period during which the payments are Institutions of higher education must used regardless of the number of made or the obligation to make the exclude work study students when owners. payments is incurred; determining the number of employees 9. When will I have to begin paying iii. Federal employment taxes for PPP loan eligibility, and must also principal and interest on my PPP imposed or withheld during the exclude payroll costs for work study loan? 75 applicable period, including the students from the calculation of payroll employee’s and employer’s share of If you submit to your lender a loan costs used to determine their PPP loan FICA (Federal Insurance Contributions forgiveness application within 10 Act) and Railroad Retirement Act taxes, amount. months after the end of your loan and income taxes required to be 5. What is the interest rate on a PPP forgiveness covered period, you will not have to make any payments of principal withheld from employees; and loan? 69 iv. Qualified sick and family leave or interest on your loan before the date wages for which a credit is allowed The interest rate will be 100 basis on which SBA remits the loan under sections 7001 and 7003 of the points or one percent, calculated on a forgiveness amount on your loan to your Families First Coronavirus Response non-compounding, non-adjustable lender (or notifies your lender that no Act (Pub. L. 116–127). basis.70 loan forgiveness is allowed). i. May fishing boat owners include Your ‘‘loan forgiveness covered payroll costs in their PPP loan 6. What will be the maturity date on a period’’ is the period beginning on the 71 applications that are attributable to PPP loan? date the lender disburses the PPP loan and ending on any date selected by the crewmembers described in section The maturity is five years. borrower that occurs during the period 3121(b)(20) of the Internal Revenue (i) beginning on the date that is 8 weeks Code? 64 66 See subsection 4.i. regarding fishing boat after the date of disbursement and (ii) Yes. A fishing boat owner may owners including payroll costs for their ending on the date that is 24 weeks after include compensation reported on Box crewmembers in the calculation of the PPP loan the date of disbursement. Your lender 5 of IRS Form 1099–MISC and paid to amount. must notify you of remittance by SBA of a crewmember described in section 67 This subsection was originally published at 85 the loan forgiveness amount (or notify 3121(b)(20) of the Code, up to $100,000 FR 27287, section III.2. (May 8, 2020) and has been you that SBA determined that no loan on an annualized basis, as prorated for modified for readability. forgiveness is allowed) and the date the period during which the payments 68 The Department of Education’s Federal Work- Study Programs described at 34 CFR part 675 are your first payment is due. Interest are made or the obligation to make the continues to accrue during the payments is incurred, as a payroll cost (1) the Federal Work-Study Program, (2) the Job Location and Development Program, and (3) Work deferment period. in its PPP loan application. Colleges Program. If you do not submit to your lender a j. Do independent contractors count 69 This subsection was originally published at 85 loan forgiveness application within 10 as employees for purposes of PPP loan FR 20811, subsection III.2.i. (April 15, 2020) and 65 calculations? has been modified to conform to additional interim 72 This subsection was originally published at 85 final rules or guidance and the Economic Aid Act. FR 20811, subsection III.2.i. (‘‘Can I apply for more 62 This provision has been modified to conform 70 Revised to conform to section 339 of the than one PPP loan?’’) (April 15, 2020) and has been to section 308 of the Economic Aid Act. This Economic Aid Act. The revision applies to PPP modified to conform to the Economic Aid Act and revision is effective as if included in the CARES Act loans made on or after December 27, 2020, but may for readability. PPP borrowers may be eligible for and applies to any loan made before, on, or after apply with respect to a PPP loan made before that a loan under section 7(a)(37) of the Small Business December 27, 2020, including forgiveness of such date upon the mutual agreement of the lender and Act, ‘‘Paycheck Protection Program Second Draw a loan. Loans,’’ see interim final rule on Second Draw PPP the borrower. A one percent interest rate provides 63 Loans that is being published separately. This subsection was originally published at 85 low cost funds to borrowers to meet eligible payroll FR 20811, subsection III.2.g. (April 15, 2020) and 73 See interim final rule on Second Draw PPP costs and other eligible expenses during this has been modified to conform to section 344 the Loans for eligibility criteria for Second Draw PPP Economic Aid Act. temporary period of economic dislocation caused Loans, which is being published separately. by the coronavirus. Second, for lenders, the 100 64 This subsection was originally published at 85 74 This subsection was originally published at 85 FR 39066, subsection III.1. (June 30, 2020) and has basis points offers an attractive interest rate relative FR 20811, subsection III.2.l. (April 15, 2020). been modified to conform to section 344 the to the cost of funding for comparable maturities. 75 This subsection was originally published at 85 Economic Aid Act and for readability. 71 This subsection was originally published at 85 FR 20811, subsection III.2.n. (April 15, 2020), as 65 This subsection was originally published at 85 FR 36308, subsection III.1.b. (June 16, 2020) and has amended by 85 FR 36038 (June 16, 2020), and has FR 20811, subsection III.2.h. (April 15, 2020). been modified for readability. been modified to conform to the Economic Aid Act.

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months after the end of your loan accounting or tracking of supplies, Health and Human Services and the forgiveness covered period, you must inventory, records and expenses); 79 Secretary of Labor; and (ii) the purchase begin paying principal and interest after ix. covered property damage costs of—(I) covered materials described in that period. For example, if a borrower’s (costs related to property damage and section 328.103(a) of title 44, Code of PPP loan is disbursed on January 25, vandalism or looting due to public Federal Regulations, or any successor 2021, the 24-week period ends on July disturbances that occurred during 2020 regulation; (II) particulate filtering 12, 2021. If the borrower does not that was not covered by insurance or facepiece respirators approved by the submit a loan forgiveness application to other compensation); National Institute for Occupational its lender by May 12, 2022, the borrower x. covered supplier costs Safety and Health, including those must begin making payments on or after (expenditures made by a borrower to a approved only for emergency use May 12, 2022. supplier of goods for the supply of authorization; or (III) other kinds of goods that—(A) are essential to the personal protective equipment, as 10. What forms do I need and how do operations of the borrower at the time at determined by the Administrator in I submit an application for a PPP which the expenditure is made; and (B) consultation with the Secretary of loan? 76 is made pursuant to a contract, order, or Health and Human Services and the The applicant must submit Paycheck purchase order—(i) in effect at any time Secretary of Labor; and (C) such Protection Program Borrower before the covered period with respect expenditures do not include residential Application Form (SBA Form 2483), or to the applicable covered loan; or (ii) real property or intangible property). lender’s equivalent form, and payroll with respect to perishable goods, in At least 60 percent of the PPP loan documentation, as described above. The effect before or at any time during the proceeds shall be used for payroll costs. lender must submit SBA Form 2484, covered period with respect to the For purposes of determining the Paycheck Protection Program Lender’s applicable covered loan); and percentage of use of proceeds for payroll Application for 7(a) Loan Guaranty, xi. covered worker protection costs, the amount of any EIDL electronically in accordance with expenditures ((A) operating or a capital refinanced will be included. For program requirements and maintain the expenditures to facilitate the adaptation purposes of loan forgiveness, however, forms and supporting documentation in of the business activities of an entity to the borrower will have to document the its files. comply with requirements established proceeds used for payroll costs in order or guidance issued by the Department of 11. How can PPP loans be used? 77 to determine the amount of forgiveness. Health and Human Services, the Centers While the Act provides that PPP loan a. The proceeds of a PPP loan are to for Disease Control, or the Occupational proceeds may be used for the purposes be used for: Safety and Health Administration, or listed above and for other allowable i. Payroll costs (as defined in the any equivalent requirements established uses described in section 7(a) of the CARES Act, Economic Aid Act and this or guidance issued by a State or local Small Business Act (15 U.S.C. 636(a)), interim final rule); government, during the period the Administrator believes that finite ii. costs related to the continuation of beginning on March 1, 2020 and ending appropriations and the structure of the group health care, life, disability, vision, the date on which the national Act warrant a requirement that or dental benefits during periods of paid emergency with respect to the COVID– borrowers use a substantial portion of sick, medical, or family leave, and group 19 expires related to the maintenance of the loan proceeds for payroll costs, health care, life, disability, vision, or standards for sanitation, social consistent with Congress’ overarching dental insurance premiums; distancing, or any other worker or goal of keeping workers paid and iii. mortgage interest payments (but customer safety requirement related to employed. This percentage is consistent not mortgage prepayments or principal COVID–19; (B) such expenditures may with the limitation on the forgiveness payments); include—(i) the purchase, maintenance, amount set forth in the Flexibility Act. iv. rent payments; or renovation of assets that create or v. utility payments; This limitation on use of the loan funds expand—(I) a drive-through window will help to ensure that the finite vi. interest payments on any other facility; (II) an indoor, outdoor, or debt obligations that were incurred appropriations available for these loans combined air or air pressure ventilation are directed toward payroll protection, before February 15, 2020; or filtration system; (III) a physical vii. refinancing an SBA EIDL loan as each loan that is issued depletes the barrier such as a sneeze guard; (IV) an appropriation, regardless of whether made between January 31, 2020 and expansion of additional indoor, outdoor, 78 portions of the loan are later forgiven. April 3, 2020; or combined business space; (V) an viii. covered operations expenditures b. How can PPP loans be used by onsite or offsite health screening individuals with income from self- (payments for any business software or capability; or (VI) other assets relating to cloud computing service that facilitates employment who file a Form 1040, the compliance with the requirements Schedule C? 80 business operations, product or service or guidance described in subparagraph delivery, the processing, payment, or The proceeds of a PPP loan are to be (A), as determined by the Administrator used for the following. tracking of payroll expenses, human in consultation with the Secretary of resources, sales and billing functions, or i. Owner compensation replacement, calculated based on 2019 or 2020 (using 79 Items viii. through xi. were added to conform the same year that was used to calculate 76 This subsection was originally published at 85 to section 304 of the Economic Aid Act. These FR 20811, subsection III.2.q. (April 15, 2020). provisions are effective as if included in the CARES the loan amount) net profit as described 77 This subsection was originally published at 85 Act and apply to any loan made before, on, or after in subsection 4.b. FR 20811, subsection III.2.r. (April 15, 2020), as December 27, 2020, including forgiveness of such ii. Employee payroll costs (as defined amended by 85 FR 36308 (June 16, 2020) and has loan, unless SBA has remitted a loan forgiveness in this interim final rule) for employees been modified to conform to the Economic Aid Act. payment to the lender on the PPP loan. Section 78 Under paragraph 7(a)(36)(Q) of the Small 1106 of the CARES Act (15 U.S.C. 9005) was whose principal place of residence is in Business Act, as amended by section 341 of the redesignated as section 7A, transferred to the Small Economic Aid Act, an EIDL loan used for purposes Business Act (15 U.S.C. 631 et seq.), and inserted 80 This subsection was originally published at 85 other than paying payroll costs and other eligible so as to appear after section 7 of the Small Business FR 21747, subsection III.1.d. (April 20, 2020) and PPP expenditures is not considered a duplication of Act (15 U.S.C. 636) in section 304(b) of the has been modified to conform to the Economic Aid the assistance available under the PPP. Economic Aid Act. Act.

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the United States, if you have The Administrator, in consultation 12. What certifications need to be employees. with the Secretary, determined that it is made? 85 iii. Mortgage interest payments (but appropriate to limit self-employed On the PPP borrower application, an not mortgage prepayments or principal individuals’ (who file a Form 1040 authorized representative of the payments) on any business mortgage Schedule C) use of loan proceeds to applicant must certify in good faith to obligation on real or personal property those types of allowable uses for which all of the below: 86 (e.g., the interest on your mortgage for the borrower made expenditures in 2019 i. The Applicant was in operation on the warehouse you purchased to store or 2020 or that were used on covered February 15, 2020, has not permanently business equipment or the interest on an property damage, as defined in section closed, and was either an eligible self- auto loan for a vehicle you use to 7A(a). The Administrator has employed individual, independent perform your business), business rent determined that this limitation on self- contractor, or sole proprietorship with payments (e.g., the warehouse where employed individuals who file a Form no employees, or had employees for you store business equipment or the 1040 Schedule C is consistent with the whom it paid salaries and payroll taxes vehicle you use to perform your or paid independent contractors, as business), and business utility payments borrower certification required by the Act; specifically, that the PPP loan is reported on a Form 1099–MISC. (e.g., the cost of electricity in the ii. Current economic uncertainty warehouse you rent or gas you use necessary ‘‘to support the ongoing operations’’ of the borrower. The makes this loan request necessary to driving your business vehicle). You support the ongoing operations of the must have claimed or be entitled to Administrator and the Secretary thus believe that this limitation is consistent applicant. claim a deduction for such expenses on iii. The funds will be used to retain your 2019 or 2020 (whichever you used with the structure of the Act to maintain existing operations and payroll and not workers and maintain payroll; or make to calculate loan amount) Form 1040 payments for mortgage interest, rent, for business expansion. This limitation Schedule C for them to be a permissible utilities, covered operations on the use of PPP loan proceeds will use. For example, if you did not claim expenditures, covered property damage also help to ensure that the finite or are not entitled to claim utilities costs, covered supplier costs, and expenses on your 2019 or 2020 Form appropriations available for these loans covered worker protection expenditures 1040 Schedule C, you cannot use the are directed toward maintaining existing as specified under the Paycheck proceeds for utilities. operations and payroll, as each loan that Protection Program Rules; I understand iv. Interest payments on any other is made depletes the appropriation. that if the funds are knowingly used for debt obligations that were incurred c. Can PPP proceeds be used for unauthorized purposes, the federal before February 15, 2020 (such amounts lobbying activities or expenditures? 83 government may hold me legally liable are not eligible for PPP loan such as for charges of fraud. (As forgiveness). No. None of the proceeds of a PPP explained above, not more than 40 v. Refinancing an SBA EIDL loan loan may be used for (1) lobbying percent of loan proceeds may be used made between January 31, 2020 and activities, as defined in section 3 of the for nonpayroll costs.) April 3, 2020 (maturity will be reset to Lobbying Disclosure Act of 1995 (2 iv. I understand that loan forgiveness PPP’s maturity of two years for PPP U.S.C. 1602); (2) lobbying expenditures will be provided for the sum of loans made before June 5, 2020 unless related to a State or local election; or (3) documented payroll costs, covered the borrower and lender mutually agree expenditures designed to influence the mortgage interest payments, covered to extend the maturity of such loans to enactment of legislation, appropriations, rent payments, covered utilities, five years, or PPP’s maturity of five regulation, administrative action, or covered operations expenditures, years for PPP loans made on or after Executive order proposed or pending covered property damage costs, covered June 5).81 before Congress or any State supplier costs, and covered worker vi. Covered operations expenditures, government, State legislature, or local protection expenditures, and not more as defined in section 7A(a) of the Small legislature or legislative body. than 40% of the forgiven amount may Business Act, to the extent they is be for non-payroll costs. If required, the deductible on Form 1040 Schedule C. d. What happens if PPP loan funds 84 Applicant will provide to the Lender vii. Covered property damage costs, as are misused? and/or SBA documentation verifying defined in section 7A(a) of the Small If you use PPP funds for unauthorized the number of full-time equivalent Business Act, to the extent they is purposes, SBA will direct you to repay employees on the Applicant’s payroll as deductible on Form 1040 Schedule C. those amounts. If you knowingly use the viii. Covered supplier costs, as well as the dollar amounts of eligible funds for unauthorized purposes, you expenses for the covered period defined in section 7A(a) of the Small will be subject to additional liability Business Act, to the extent they is following this loan. such as charges for fraud. If one of your v. The Applicant has not and will not deductible on Form 1040 Schedule C. shareholders, members, or partners uses ix. Covered worker protection receive another loan under the Paycheck PPP funds for unauthorized purposes, Protection Program, section 7(a)(36) of expenditures, as defined in section SBA will have recourse against the 7A(a) of the Small Business Act, to the the Small Business Act (15 U.S.C. shareholder, member, or partner for the extent they is deductible on Form 1040 85 82 unauthorized use. This subsection was originally published at 85 Schedule C. FR 20811, subsection III.2.s. (April 15, 2020), as amended by 85 FR 36308 (June 16, 2020) and has 81 Under section 7(a)(36)(Q) of the Small Business Act and apply to any loan made before, on, or after been modified to conform to the Economic Aid Act Act, as amended by section 341 of the Economic December 27, 2020, including forgiveness of such and the revised PPP Borrower Application Form Aid Act, an EIDL loan used for purposes other than loan, unless SBA has remitted a loan forgiveness (SBA Form 2483). paying payroll costs and other eligible PPP 86 payment to the lender on the PPP loan. A representative of the applicant can certify for expenditures is not considered a duplication of the 83 the business as a whole if the representative is assistance available under the PPP. This subsection has been added to conform to legally authorized to do so. The certifications have 82 Items vi. through ix. were added to conform to section 319 of the Economic Aid Act. been revised to conform to the Economic Aid Act section 304 of the Economic Aid Act. These 84 This subsection was originally published at 85 and the revised PPP Borrower Application Form provisions are effective as if included in the CARES FR 20811, subsection III.2.s. (April 15, 2020). (SBA Form 2483).

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636(a)(36)) (this does not include consultation with the Department of the the PPP loan for payroll costs, and not Paycheck Protection Program second Treasury, issued additional guidance on more than 40 percent of the loan draw loans, section 7(a)(37) of the Small May 13, 2020 concerning how SBA will forgiveness amount may be attributable Business Act (15 U.S.C. 636(a)(37)). review the required good-faith to nonpayroll costs. For example, if a vi. The Applicant has not and will not certification. See FAQ 46 (posted May borrower uses 59 percent of its PPP loan receive a Shuttered Venue Operator 13, 2020). This guidance included a safe for payroll costs, it will not receive the grant from SBA. harbor providing that any PPP borrower, full amount of loan forgiveness it might vii. The President, the Vice President, together with its affiliates, that received otherwise be eligible to receive. Instead, the head of an Executive department, or PPP loans with an original principal the borrower will receive partial loan a Member of Congress, or the spouse of amount of less than $2 million will be forgiveness, based on the requirement such person as determined under deemed to have made the required that 60 percent of the forgiveness applicable common law, does not certification concerning the necessity of amount must be attributable to payroll directly or indirectly hold a controlling the loan request in good faith. costs. For example, if a borrower receives a $100,000 PPP loan, and interest in the Applicant, with such 14. Can my PPP loan be forgiven in during the covered period the borrower terms having the meanings provided in whole or in part? 88 section 322 of the Economic Aid to spends $54,000 (or 54 percent) of its Hard-Hit Small Businesses, Nonprofits, Yes. The amount of loan forgiveness loan on payroll costs, then because the and Venues Act. can be up to the full principal amount borrower used less than 60 percent of its viii. The Applicant is not an issuer, of the loan and any accrued interest. An loan on payroll costs, the maximum the securities of which are listed on an eligible borrower will not be responsible amount of loan forgiveness the borrower exchange registered as a national for any loan payment if the borrower may receive is $90,000 (with $54,000 in securities exchange under section 6 of uses all of the loan proceeds for payroll costs constituting 60 percent of the Securities Exchange Act of 1934 (15 forgivable purposes and employee and the forgiveness amount and $36,000 in U.S.C. 78f). compensation levels are maintained or, nonpayroll costs constituting 40 percent ix. I further certify that the if not, an applicable safe harbor or of the forgiveness amount). Because the information provided in this application exemption applies. The actual amount Economic Aid Act changed the loan and the information provided in all of loan forgiveness will depend, in part, forgiveness covered period from either supporting documents and forms is true on the total amount of payroll costs an 8- or 24-week period to a covered and accurate in all material respects. I (including employer contributions for period between 8 and 24 weeks at the understand that knowingly making a group health, life, disability, vision and election of the borrower, SBA is false statement to obtain a guaranteed dental insurance), payments of interest eliminating the ‘‘alternative covered loan from SBA is punishable under the on mortgage obligations incurred before period’’ as defined in the interim final law, including under 18 U.S.C. 1001 February 15, 2020, rent payments on rule published at 85 FR 33004, 33006 and 3571 by imprisonment of not more leases dated before February 15, 2020, (June 1, 2020), as amended. than five years and/or a fine of up to utility payments for service that began Additionally, an eligible borrower $250,000; under 15 U.S.C. 645 by before February 15, 2020, covered that received a loan of $150,000 or less imprisonment of not more than two operations expenditures, covered shall not, at the time of its application years and/or a fine of not more than property damage costs, covered supplier for loan forgiveness, be required to $5,000; and, if submitted to a federally costs, and covered worker protection submit any application or expenditures over the loan forgiveness documentation in addition to the insured institution, under 18 U.S.C. 89 1014 by imprisonment of not more than covered period. Payroll costs that are certification and information required thirty years and/or a fine of not more qualified wages taken into account in by paragraph 7A(l)(1)(A) of the Small than $1,000,000. determining the Employer Retention Business Act. Such borrowers must x. I acknowledge that the Lender will Credit are not eligible for loan retain records relevant to the form that confirm the eligible loan amount using forgiveness. The ‘‘loan forgiveness prove compliance with the PPP required documents submitted. I covered period’’ is the period beginning requirements—with respect to understand, acknowledge, and agree on the date the lender disburses the PPP employment records, for the 4-year that the Lender can share the tax loan and ending on any date selected by period following submission of the loan information with SBA’s authorized the borrower that occurs during the forgiveness application, and with representatives, including authorized period (i) beginning on the date that is respect to other records, for the 3-year 8 weeks after the date of disbursement representatives of the SBA Office of period following submission of the loan and (ii) ending on the date that is 24 Inspector General, for the purpose of forgiveness application. All other weeks after the date of disbursement. borrowers must follow the existing compliance with SBA Loan Program To receive full loan forgiveness, a Requirements and all SBA reviews. requirements for loan forgiveness borrower must use at least 60 percent of applications and records retention. SBA 13. Limited Safe Harbor With Respect to may review and audit PPP loans of Certification Concerning Need for PPP 88 This subsection replaces the rule originally $150,000 or less and access any records Loan Request 87 published at 85 FR 20811, subsection III.2.o (April 15, 2020), as amended by 85 FR 36308 (June 16, the borrower is required to retain. All The CARES Act requires each 2020) and has been modified to conform to the borrowers with loans of any size must applicant applying for a PPP loan to Economic Aid Act. provide documentation independently 89 certify in good faith ‘‘that the Covered operations expenditures, covered to a lender to satisfy relevant Federal, property damage costs, covered supplier costs, and State, local or other statutory or uncertainty of current economic covered worker protection expenditures were added conditions makes necessary the loan as eligible expenses in section 304 of the Economic regulatory requirements or in request to support the ongoing Aid Act. Except for loans made pursuant to section connection with an SBA loan review. obligations’’ of the applicant. SBA, in 7(a)(36) of the Small Business Act for which SBA The Economic Aid Act repealed the has remitted a loan forgiveness payment to the CARES Act provision requiring SBA to lender before December 27, 2020, these eligible 87 This subsection has been added to codify the expenses apply to any loan made before, on, or after deduct EIDL Advance Amounts safe harbor contained in FAQ 46 (posted May 13, December 27, 2020, including forgiveness of such received by borrowers from the 2020). a loan. forgiveness payment amounts remitted

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by SBA to the lender. The EIDL authorized to make PPP loans (and is in good standing with the appropriate Advance Amount received by the loans under section 7(a)(37) of the Small Federal banking agency.93 borrower will not reduce the amount of Business Act) up to $806.45 billion by d. Qualified institutions described in forgiveness to which the borrower is March 31, 2021, the Adminstrator and 1.c.i. and ii. will be automatically entitled and will not be deducted from the Secretary have jointly determined qualified under delegated authority by the forgiveness payment amount that that authorizing additional lenders is the SBA upon transmission of CARES SBA remits to the lender. Any EIDL necessary to achieve the purpose of Act Section 1102 Lender Agreement Advance Amounts previously deducted allowing as many eligible borrowers as (SBA Form 3506) unless they currently from a borrower’s forgiveness amount possible to receive loans by the March are designated in Troubled Condition by will be remitted to the lender, together 31, 2021 deadline. their primary Federal regulator or are with interest to the remittance date. c. The following types of lenders have subject to a formal enforcement action by their primary Federal regulator that been determined to meet the criteria and 15. Do independent contractors count as addresses unsafe or unsound lending employees for purposes of PPP loan are eligible to make PPP loans unless 90 practices. forgiveness? they currently are designated in e. A non-bank lender may be No, independent contractors have the Troubled Condition by their primary approved to make PPP loans if it has ability to apply for a PPP loan on their Federal regulator or are subject to a originated, maintained, or serviced more own so they do not count for purposes formal enforcement action with their than $10 million in business loans or of a borrower’s PPP loan forgiveness. primary Federal regulator that addresses other commercial financial receivables unsafe or unsound lending practices: during a 12-month period in the past 36 16. For loans made prior to December i. Any federally insured depository 27, 2020, what additional months, if the non-bank lender is (1) a institution or any federally insured community development financial documentation must a borrower submit credit union; when the President of the United States, institution (other than a federally Vice President of the United States, the ii. Any Farm Credit System insured bank or federally insured credit head of an Executive department, or a institution 92 (other than the Federal union) or (2) a majority minority-, Member of Congress, or the spouse of Agricultural Mortgage Corporation) as women-, or veteran/military-owned 94 any of the preceding, directly or defined in 12 U.S.C. 2002(a) that applies lender. indirectly holds a controlling interest in the requirements under the Bank 2. Do lenders have to register in the borrower? Secrecy Act and its implementing SAM.gov to make PPP loans? 95 regulations (collectively, BSA) as a For PPP loans made before December federally regulated financial institution, Yes. Given the exigent circumstances 27, 2020, if the President of the United or functionally equivalent requirements in which small businesses and lenders States, Vice President of the United that are not altered by this rule; and currently find themselves due to the States, the head of an Executive COVID–19 pandemic, PPP lenders will department, or a Member of Congress, or iii. Any depository or non-depository have thirty (30) days from the date of the spouse of such person as determined financing provider that originates, the first PPP loan disbursement made by under applicable common law, directly maintains, and services business loans them after December 27, 2020 to or indirectly holds a controlling interest or other commercial financial complete SAM registration and provide in the borrower, the principal executive receivables and participation interests; SBA with the lender’s unique entity officer, or individual performing a has a formalized compliance program; identifier. similar function, of the borrower must applies the requirements under the BSA disclose that information to SBA. Such as a federally regulated financial 3. What do lenders have to do in terms disclosure must be made not later than institution, or the BSA requirements of of loan underwriting? 96 January 26, 2021, if the borrower an equivalent federally regulated Each lender shall: submitted an application for forgiveness financial institution; has been operating a. Confirm receipt of borrower before December 27, 2020, or not later since at least February 15, 2019, and has certifications contained in Paycheck than 30 days after submitting an originated, maintained, or serviced more Protection Program Borrower application for forgiveness. than $50 million in business loans or Application Form (SBA Form 2483) other commercial financial receivables issued by the Administration or lender’s C. What do lenders need to know and during a consecutive 12 month period do? equivalent form; in the past 36 months, or is a service b. Confirm receipt of information 1. Who is eligible to make PPP loans? 91 provider to any insured depository demonstrating that a borrower was a. All SBA 7(a) lenders are institution that has a contract to support either an eligible self-employed automatically approved to make PPP such institution’s lending activities in individual, independent contractor, or loans on a delegated basis. accordance with 12 U.S.C. 1867(c) and b. The Act provides that the authority 93 This subsection c.iii. was modified to to make PPP loans can be extended to 92 Section 314 of the Economic Aid Act contains implement the rule originally published at 85 FR the following information related to Farm Credit 26324, subsection III.2.a. (May 4, 2020). additional lenders determined by the 94 System Institutions: ‘‘(1) APPLICABLE RULES.— Lenders described in this subsection (e.) should Administrator and the Secretary to have Solely with respect to loans under paragraphs (36) follow the special instructions in footnote 1 of the the necessary qualifications to process, and (37) of section 7(a) of the Small Business Act 1102 Lender Agreement—Non-Bank and Non- close, disburse, and service loans made (15 U.S.C. 636(a)), Farm Credit Administration Insured Depository Institution Lenders (SBA Form 3507). This subsection (e.) was adapted from the with the SBA guarantee. Since SBA is regulations and guidance issued as of July 14, 2020, and compliance with such regulations and rule originally published at 85 FR 26324, subsection guidance, shall be deemed functionally equivalent III.2.b. (May 4, 2020). 90 This subsection was originally published at 85 to requirements referenced in section 3(a)(iii)(II) of 95 This subsection adds a new requirement that FR 20811, subsection III.2.p. (April 15, 2020). the interim final rule of the Administration entitled all PPP lenders must register in SAM.gov. See 2 CFR 91 This subsection was originally published at 85 ‘Business Loan Program Temporary Changes; 25.110(c)(2)(iii). FR 20811, subsection III.3.a. (April 15, 2020) and Paycheck Protection Program’ (85 FR 20811 (April 96 This subsection was originally published at 85 has been modified to conform to additional interim 15, 2020)) or any similar requirement referenced in FR 20811, subsection III.3.b. (April 15, 2020) and final rules or guidance and sections 323 and 343 of that interim final rule in implementing such has been modified to conform to additional rules or the Economic Aid Act. paragraph (37).’’ guidance and the Economic Aid Act.

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sole proprietorship with no employees while adhering to their BSA obligations. reported information if the borrower or had employees for whom the Entities that wish to communicate such submits documentation supporting its borrower paid salaries and payroll taxes COVID–19-related concerns to FinCEN request for loan forgiveness and attests on or around February 15, 2020; should go to www.FinCEN.gov, click on that it accurately verified the payments c. Confirm the dollar amount of ‘‘Need Assistance,’’ and select for eligible costs. average monthly payroll costs for 2019 ‘‘COVID19’’ in the subject drop-down 5. What fees will lenders be paid? 100 or 2020 by reviewing the payroll list. documentation submitted with the Each lender’s underwriting obligation For PPP loans made on or after borrower’s application; 97 and under the PPP is limited to the items December 27, 2020, SBA will pay d. Follow applicable BSA above and reviewing the ‘‘Paycheck lenders fees, based on the balance of the requirements: Protection Borrower Application Form.’’ financing outstanding at the time of i. Federally insured depository Borrowers must submit such disbursement of the loan, for processing institutions and federally insured credit documentation as is necessary to PPP loans in the following amounts: unions should continue to follow their establish eligibility such as payroll i. For loans of not more than $50,000, existing BSA protocols when making records, payroll tax filings, or Form an amount equal to the lesser of fifty PPP loans to either new or existing 1099–MISC, Schedule C or F, income (50) percent or $2,500; customers who are eligible borrowers and expenses from a sole ii. Five (5) percent for loans of more under the PPP. PPP loans for existing proprietorship, or bank records. For than $50,000 and not more than customers will not require re- borrowers that do not have any such $350,000; verification under applicable BSA documentation, the borrower must iii. Three (3) percent for loans of more requirements, unless otherwise provide other supporting than $350,000 and less than $2,000,000; indicated by the institution’s risk-based documentation, such as bank records, and approach to BSA compliance. sufficient to demonstrate the qualifying iv. One (1) percent for loans of at least ii. Entities that are not presently payroll amount. $2,000,000. subject to the requirements of the BSA, A lender may rely on any certification SBA will pay the fee not later than 5 should, prior to engaging in PPP lending or documentation submitted by an days after the reported disbursement of activities, including making PPP loans applicant for a PPP loan or an eligible the PPP loan and, as required by the to either new or existing customers who recipient or eligible entity that (A) is Economic Aid Act, may not require the are eligible borrowers under the PPP, submitted pursuant to all applicable fee to be repaid by the lender unless the establish an anti-money laundering statutory requirements, regulations, and lender is found guilty of an act of fraud (AML) compliance program equivalent guidance related to a PPP loan, in connection with the PPP loan. to that of a comparable federally including under paragraph 7(a)(36) of regulated institution. Depending upon 6. Can PPP loans be sold into the the Small Business Act (15 U.S.C. 101 the comparable federally regulated secondary market? 636(a)(36)); and (B) attests that the institution, such a program may include applicant, eligible recipient, or eligible Yes. A PPP loan may be sold on the a customer identification program (CIP), entity, as applicable, has accurately secondary market after the loan is fully which includes identifying and provided the certification or disbursed. A PPP loan may be sold on verifying their PPP borrowers’ identities documentation to the lender in the secondary market at a premium or (including e.g., date of birth, address, accordance with the statutory a discount to par value. and taxpayer identification number), requirements, regulations, and guidance 7. Do the requirements for loan pledges and, if that PPP borrower is a company, related to PPP loans. With respect to a under 13 CFR 120.434 apply to PPP following any applicable beneficial lender that relies on such a certification loans pledged for borrowings from a ownership information collection or documentation related to a PPP loan, Federal Reserve Bank (FRB) or advances requirements. Alternatively, if available, an enforcement action may not be taken by a Federal Home Loan Bank entities may rely on the CIP of a against the lender, and the lender shall (FHLB)? 102 federally insured depository institution not be subject to any penalties relating or federally insured credit union with No. Pursuant to SBA regulations at 13 to loan origination or forgiveness of the an established CIP as part of its AML CFR 120.435(d) and (e), a pledge of 7(a) PPP loan, if—(A) the lender acts in good program. In either instance, entities loans to a FRB or FHLB does not require faith relating to loan origination or should also understand the nature and SBA’s prior written consent or notice to forgiveness of the PPP loan based on purpose of their PPP customer SBA. SBA, in consultation with that reliance; and (B) all other relevant relationships to develop customer risk Treasury, has determined that for Federal, State, local, and other statutory profiles. Such entities will also purposes of loans made under the PPP, and regulatory requirements applicable generally have to identify and report the additional requirements set forth in to the lender are satisfied with respect certain suspicious activity to the U.S. 120.434 shall also not apply. This to the PPP loan.98 Department of the Treasury’s Financial would mean, for example, that SBA Crimes Enforcement Network (FinCEN). 4. Can lenders rely on borrower would not have to approve loan If such entities have questions with documentation for loan forgiveness? 99 to issue a consolidated interim final rule governing regard to meeting these requirements, Yes. The lender does not need to they should contact the FinCEN all aspects of loan forgiveness and the loan review independently verify the borrower’s process. Regulatory Support Section at FRC@ 100 This subsection was originally published at 85 fincen.gov. In addition, FinCEN has 98 This paragraph was added to conform to FR 20811, subsection III.3.d. (April 15, 2020) and created a COVID–19-specific contact section 305 of the Economic Aid Act. This shall be has been modified to conform to section 340 of the channel, via a specific drop-down effective as if included in the CARES Act and shall Economic Aid Act. category, for entities to communicate to apply to any loan made before, on, or after 101 This subsection was originally published at 85 December 27, 2020, including forgiveness of such FR 20811, subsection III.4.d (April 15, 2020) and FinCEN COVID–19-related concerns a loan. modified to reflect that advance purchases are not 99 This subsection was originally published at 85 available. 97 See PPP FAQ 1 (April 3, 2020) for further FR 20811, subsection III.3.c. (April 15, 2020) and 102 This subsection was originally published at 85 information on this step. has been modified for readability. SBA also intends FR 21747, subsection III.3. (April 20, 2020).

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documents or require a multi-party terminated and repaid after e. All loans will be processed by all agreement among SBA, the lender, and disbursement (including if a borrower lenders under delegated authority and others. repays the PPP loan proceeds to lenders will be permitted to rely on conform to the borrower’s certification certifications of the borrower in order to 8. Are lenders required to use a determine eligibility of the borrower promissory note provided by SBA or regarding the necessity of the PPP loan may they use their own? 103 request). If the lender has received a and the use of loan proceeds. processing fee on a loan that was 2. Do lenders have to apply the ‘‘credit Lenders may use their own cancelled or voluntarily terminated and elsewhere test’’? 110 promissory note or an SBA form of repaid after disbursement (including if a promissory note. borrower repaid the PPP loan proceeds No. When evaluating an applicant’s 9. Are lenders required to use a separate to conform to the borrower’s eligibility lenders will not be required to SBA Authorization document to issue certification regarding the necessity of apply the ‘‘credit elsewhere test’’ (as set PPP loans? 104 the PPP loan request), SBA will not forth in section 7(a)(1)(A) of the Small require the lender to repay the Business Act (15 U.S.C. 636) and SBA No. A lender does not need a separate processing fee unless the lender is regulations at 13 CFR 120.101). SBA Authorization for SBA to guarantee found guilty of an act of fraud in a PPP loan. However, lenders must have 3. Are there any fee waivers? 111 connection with the PPP loan. In executed SBA Form 2484 (the Lender addition to providing ACH credit a. There will be no up-front guarantee Application Form—Paycheck Protection information to direct payment of the fee payable to SBA by the borrower; Program Loan Guaranty) 105 to issue PPP requested processing fee, lenders will be b. There will be no lender’s annual loans and receive a loan number for required to confirm that all PPP loans service fee (‘‘on-going guaranty fee’’) each originated PPP loan. Lenders may for which the lender is requesting a payable to SBA; include in their promissory notes for c. There will be no subsidy PPP loans any terms and conditions, processing fee have been fully disbursed on the disbursement dates and in the recoupment fee; and including relating to amortization and d. There will be no fee payable to SBA disclosure, that are not inconsistent loan amounts reported. A lender must report through either E-Tran Servicing for any guarantee sold into the with section 1102 of the CARES Act and secondary market. section 7A of the Small Business Act, or the SBA Form 1502 report any PPP the PPP Interim Final Rules and loans that have been cancelled before 4. Who pays the fee to an agent who guidance, and SBA Form 2484. See FAQ disbursement or that have been provides assistance in connection with a 21 (posted April 13, 2020). The decision cancelled or voluntarily terminated and PPP loan? 112 repaid after disbursement. not to require a separate SBA Agent fees may not be paid out of the Authorization in order to ensure that 11. How do lenders report proceeds of a PPP loan. If a borrower critical PPP loans are disbursed as disbursements on PPP loans that are has knowingly retained an agent, such efficiently as practicable. approved for loan increases due to the fees will be paid by the borrower. A 107 10. By when must a lender electronically Economic Aid Act? lender is only responsible for paying submit an SBA Form 1502 indicating Lenders must submit the SBA Form fees to an agent for services for which that PPP loan funds have been 1502 information within 20 calendar the lender directly contracts with the disbursed? 106 days after a PPP loan increase is agent. The total amount that an agent SBA has made available a specific approved following the SBA Form 1502 may collect from the lender for SBA Form 1502 reporting process reporting process. See subsection C.10. assistance in preparing an application through which PPP lenders report on for more information. for a PPP loan (including referral to the PPP loans and collect the processing fee lender) may not exceed: D. What do both borrowers and lenders a. One (1) percent for loans of not on fully disbursed loans to which they need to know and do? are entitled. Lenders must electronically more than $350,000; upload SBA Form 1502 information 1. What are the loan terms and b. 0.50 percent for loans of more than within 20 calendar days after a PPP loan conditions? 108 $350,000 and less than $2 million; and is approved. The lender must report on c. 0.25 percent for loans of at least $2 Loans will be guaranteed under the million. SBA Form 1502 whether it has fully PPP under the same terms, conditions disbursed PPP loan proceeds. A lender The Act authorizes the Administrator and processes as other 7(a) loans, with to establish limits on agent fees. The will not receive a processing fee: (1) certain changes including but not Prior to full disbursement of the PPP Administrator, in consultation with the limited to: Secretary, determined that the agent fee loan; (2) if the PPP loan is cancelled a. The guarantee percentage is 100 before disbursement; or (3) if the PPP limits set forth above are reasonable percent. based upon the application loan is cancelled or voluntarily b. No collateral will be required. c. No personal guarantees will be 103 This subsection was originally published at 85 applies to PPP loans made on or after December 27, FR 23450, subsection III.1.a. (April 28, 2020). required. 2020, but may apply with respect to a PPP loan 104 This subsection was originally published at 85 d. The interest rate will be 100 basis made before that date upon the mutual agreement FR 23450, subsection III.1.b. (April 28, 2020) and points or one percent, calculated on a of the lender and the borrower. has been modified to conform to the Economic Aid non-compounding, non-adjustable 110 This subsection was originally published at 85 FR 20811, subsection III.3.e. (April 15, 2020). Act. basis.109 105 This requirement is satisfied by a lender when 111 This subsection was originally published at 85 the lender completes the process of submitting a FR 20811, subsection III.4.a. (April 15, 2020). loan through the E-Tran system; no transmission or 107 This subsection was added to conform to the 112 This subsection was originally published at 85 retention of a physical copy of Form 2484 is Economic Aid Act. FR 20811, subsection III.4.c. (April 15, 2020) and required. 108 This subsection was originally published at 85 modified to conform to section 340 of the Economic 106 This subsection was originally published at 85 FR 20811, subsection III.4.a. (April 15, 2020) and Aid Act. This revision is effective as if included in FR 26321, subsection III.1.b. (May 4, 2020) and has modified to conform to the Economic Aid Act. the CARES Act and applies to PPP loans made been modified to conform to the Economic Aid Act 109 This subsection (d) was revised to conform to before, on, or after December 27, 2020, including and for readability. section 339 of the Economic Aid Act. The revision forgiveness of such a loan.

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requirements and the fees that lenders the PPP Program, which is $10 million 8. Which other PPP borrowers can receive for making PPP loans. for an individual borrower or $20 reapply or request an increase in their million for a corporate group. PPP loan amount? 118 5. Can a borrower take multiple draws from a PPP loan and thereby delay the Additionally, the borrower must The following borrowers can reapply start of the covered period? 113 provide the lender with required or request an increase in their PPP loan documentation to support the amount: No. The lender must make a one-time, calculation of the increase. Any request a. If a borrower returned all of a PPP full disbursement of the PPP loan for an increase must be submitted loan, the borrower may reapply for a within ten calendar days of loan electronically in E-Tran on or before PPP loan in an amount the borrower is approval; for the purposes of this rule, March 31, 2021, and is subject to the eligible for under current PPP rules. a loan is considered approved when the availability of funds. b. If a borrower returned part of a PPP loan is assigned a loan number by loan, the borrower may reapply for an 114 As described in subsection B.1.c., SBA. amount equal to the difference between Notwithstanding this limitation, partnerships, rather than individual partners, are eligible for a PPP loan. As the amount retained and the amount lenders are not responsible for delays in previously approved. disbursement attributable to a described in subsection B.4.e., self- employment income of general active c. If a borrower did not accept the full borrower’s failure to timely provide amount of a PPP loan for which it was required loan documentation, including partners could be reported as a payroll cost, up to $100,000 on an annualized approved, the borrower may request an a signed promissory note. Loans for increase in the amount of the PPP loan basis, as prorated for the period during which funds have not been disbursed up to the amount previously approved. which the payments are made or the because a borrower has not submitted Any request for an increase must be obligation to make the payments is required loan documentation within 20 submitted electronically in E-Tran on or calendar days of loan approval shall be incurred, on a PPP loan application before March 31, 2021, and is subject to cancelled by the lender. When filed by or on behalf of the partnership. the availability of funds. SBA will issue disbursing loans, lenders must send any For guidance describing how to additional guidance on the process to amount of loan proceeds designated for calculate partnership PPP loan amounts reapply or request a loan increase under the refinance of an EIDL loan directly to and defining the self-employment subsections D.6, D.7, and D.8. SBA and not to the borrower. income of partners, see How to Calculate Maximum Loan Amounts, 9. If a borrower’s PPP loan has already 6. If a partnership received a PPP loan Question 4 at https://www.sba.gov/sites/ been fully disbursed, can the lender that did not include any compensation default/files/2020-04/How-to-Calculate- make an additional disbursement for for its partners, can the loan amount be 119 Loan-Amounts.pdf (April 20, 2020). the increased loan proceeds? increased to include partner Yes. Notwithstanding the requirement compensation? 115 7. If a seasonal employer received a PPP set forth in paragraph 1.a. of the interim loan before December 27, 2020, can the Yes. If a partnership received a PPP final rule on disbursements posted on loan amount be increased based on a loan that only included amounts April 28, 2020, i.e., that lenders make a revised calculation of the maximum necessary for payroll costs of the one-time, full disbursement of the PPP 117 partnership’s employees and other loan amount? loan within ten calendar days of loan eligible operating expenses, but did not Yes. If a seasonal employer received approval, if a PPP loan is increased include any amount for partner a PPP loan before December 27, 2020, under subsections D.6., D.7., or D.8., the compensation,116 the lender may and such employer would be eligible for lender may make a single additional electronically submit a request through a higher maximum loan amount under disbursement of the increased loan SBA’s E-Tran Servicing site to increase proceeds. the PPP loan amount to include section 336 of the Economic Aid Act, as appropriate partner compensation, even described in subsection B.4.c., the 10. Are recipients of PPP loans entitled if the loan has been fully disbursed and lender may electronically submit a to exemptions on the grounds provided even if the lender’s first SBA Form 1502 request through SBA’s E-Tran Servicing in Federal nondiscrimination laws for report to SBA on the PPP loan has site to increase the PPP loan amount, sex-specific admissions practices, sex- already been submitted. In no event can even if the loan has been fully disbursed specific domestic violence shelters, the increased loan amount exceed the and even if the lender’s first SBA Form coreligionist housing, or Indian tribal maximum loan amount allowed under 1502 report to SBA on the PPP loan has preferences in connection with adoption already been submitted. In no event can or foster care practices? 120 113 This subsection was originally published at 85 the increased loan amount exceed the Yes. With respect to any loan or loan FR 26321, subsection III.1.a. (May 4, 2020), as maximum PPP loan amount ($10 forgiveness under the PPP, the amended by 85 FR 26321 (June 19, 2020), and has million for an individual borrower or been modified for readability. nondiscrimination provisions in the 114 If the tenth calendar day is a Saturday, $20 million for a corporate group). applicable SBA regulations incorporate Sunday, or legal holiday, the period continues to Additionally, the borrower must the limitations and exemptions run until the end of the next business day. provide the lender with required provided in corresponding Federal 115 This subsection was originally published at 85 documentation to support the statutory or regulatory FR 29842, subsection III.1.a. (May 19, 2020) and has calculation of the increase. Any request been revised to conform to sections 312 and 344 of the Economic Aid Act. for an increase must be submitted 118 This subsection was added to conform to 116 A partner in a partnership may not submit a electronically in E-Tran on or before section 312 of the Economic Aid Act. See also separate PPP loan application as a self-employed March 31, 2021, and is subject to the recalculation available under subsection B.4.d. above for farmers and ranchers. individual. Instead, the self-employment income of availability of funds. general active partners may be reported as a payroll 119 This subsection was originally published at 85 cost, up to $100,000 on an annualized basis, as FR 29842, subsection III.2.a. (May 19, 2020) and prorated for the period during which the payments 117 This subsection was originally published at 85 revised to conform to section 312 of the Economic are made or the obligation to make the payments FR 29842, subsection III.1.b. (May 19, 2020) and has Aid Act. is incurred, on a PPP loan application filed by or been revised to conform to sections 312 and 336 of 120 This subsection was originally published at 85 on behalf of the partnership. the Economic Aid Act. FR 27287, section III.1. (May 8, 2020).

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nondiscrimination provisions for sex- and Budget’s Office of Information and has no preemptive effect but does have specific admissions practices at Regulatory Affairs (OIRA) has some retroactive effect consistent with preschools, non-vocational elementary determined that this is a major rule specific applicability provisions of the or secondary schools, and private under the Congressional Review Act (5 Economic Aid Act (such provisions are undergraduate higher education U.S.C. 804(2)). SBA, however, is identified in the footnotes). proceeding under the emergency institutions under Title IX of the Executive Order 13132 Education Amendments of 1972 (20 provision at Executive Order 12866 U.S.C. 1681 et seq.), for sex-specific section 6(a)(3)(D) based on the need to SBA has determined that this rule emergency shelters and coreligionist move expeditiously to mitigate the will not have substantial direct effects housing under the Fair Housing Act of current economic conditions arising on the States, on the relationship 1968 (42 U.S.C. 3601 et seq.), and for from the COVID–19 emergency. This between the National Government and adoption or foster care practices giving rule’s designation under Executive the States, or on the distribution of child placement preferences to Indian Order 13771 will be informed by public power and responsibilities among the tribes under the Indian Child Welfare comment. various layers of government. Therefore, Act of 1978 (25 U.S.C. 1901 et seq.). This rule is necessary to implement SBA has determined that this rule has In addition, for purposes of the PPP, the Economic Aid Act in order to no federalism implications warranting SBA regulations do not bar a religious provide economic relief to small preparation of a federalism assessment. nonprofit entity from making decisions businesses nationwide adversely Paperwork Reduction Act, 44 U.S.C. with respect to the membership or the impacted under the COVID–19 Chapter 35 employment of individuals of a Emergency Declaration. We anticipate SBA has determined that this rule particular religion to perform work that this rule will result in substantial requires revisions to existing connected with the carrying on by such benefits to small businesses, their recordkeeping or reporting requirements nonprofit of its activities. employees, and the communities they serve. However, we lack data to estimate of the Paycheck Protection Program E. Additional Information the effects of this rule. (PPP) information collection (OMB All loans guaranteed by the SBA The Administrator of OIRA has Control Number 3245–0407) as a result pursuant to the CARES Act and the determined that this is a major rule for of amendments made to the PPP by the Economic Aid Act will be made purposes of the Congressional Review Economic Aid Act and implemented in consistent with constitutional, statutory, Act (5 U.S.C. 801 et seq.) (CRA). Under this interim final rule. The revisions and regulatory protections for religious section 801(3) of the CRA, a major rule will affect the PPP Borrower liberty, including the First Amendment takes effect 60 days after the rule is Application Form (SBA Form 2483), the to the Constitution, the Religious published in the Federal Register. PPP Lender Application Form (SBA Freedom Restoration Act, 42 U.S.C. Notwithstanding this requirement, Form 2484), the Lender Application 2000bb–1 and bb–3, and SBA regulation section 808(2) of the CRA allows Form for Federally Insured Depository at 13 CFR 113.3–1h, which provides agencies to dispense with the Institutions, Federally Insured Credit that nothing in SBA nondiscrimination requirements of section 801 when the Unions, and Farm Credit System regulations shall apply to a religious agency for good cause finds that such Institutions (SBA Form 3506), and the corporation, association, educational procedure would be impracticable, Lender Application Form for Non-Bank institution or society with respect to the unnecessary, or contrary to the public and Non-Insured Depository Institution membership or the employment of interest and the rule shall take effect at Lenders (SBA Form 3507). SBA Form 2483 has been revised to individuals of a particular religion to such time as the agency promulgating add housing cooperatives, section perform work connected with the the rule determines. Pursuant to section 501(c)(6) organizations, destination carrying on by such corporation, 808(2) of the CRA, SBA finds, for good marketing organizations, and certain association, educational institution or cause, that a 60-day delay in the news organizations to the categories of society of its religious activities. effective date is unnecessary and eligible entities; to collect the NAICS SBA may provide further guidance, if contrary to the public interest. code of the applicant; to add additional needed, through SBA notices and a As discussed elsewhere in this eligible use of proceeds; and to add or program guide which will be posted on interim final rule, the last day to apply revise the certifications to incorporate SBA’s website at www.sba.gov. for and receive a PPP loan is March 31, the Economic Aid Act amendments. Questions on the Paycheck Protection 2021. Given the short duration of this Changes were made to SBA Form 2484 Program 7(a) Loans may be directed to program, and the urgent need to issue to conform to the changes made to SBA the Lender Relations Specialist in the loans quickly, the Administrator in Form 2483. SBA Forms 3506 and 3507 local SBA Field Office. The local SBA consultation with the Secretary has were revised to extend the term through Field Office may be found at https:// determined that it is impractical and not March 31, 2021; restate the way interest www.sba.gov/tools/local-assistance/ in the public interest to provide a rate is calculated; and make clarifying districtoffices. delayed effective date. An immediate effective date will give small businesses changes for consistency with program Compliance With Executive Orders the maximum amount of time to apply requirements. 12866, 12988, 13132, 13563, and 13771, for loans and lenders the maximum SBA is developing a process to collect the Paperwork Reduction Act (44 amount of time to process applications the information necessary for eligible U.S.C. Ch. 35), and the Regulatory before the program ends. borrowers to reapply or request an Flexibility Act (5 U.S.C. 601–612) increase in their PPP loan amount as Executive Order 12988 described in this interim final rule. Executive Orders 12866, 13563, and SBA has drafted this rule, to the SBA has requested emergency 13771 extent practicable, in accordance with approval of the revisions to this PPP This interim final rule is the standards set forth in section 3(a) information collection to enable the economically significant for the and 3(b)(2) of Executive Order 12988, to Agency to resume the reauthorized PPP purposes of Executive Orders 12866 and minimize litigation, eliminate as quickly as possible. Without such 13563, and the Office of Management ambiguity, and reduce burden. The rule emergency approval, the authority for

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the program would expire before the Administration’s Office of Advocacy Comment Date: Comments must be procedural steps, including the guide: How to Comply with the received on or before February 16, 2021. comment periods generally required by Regulatory Flexibility Ac. Ch.1. p.9. ADDRESSES: You may submit comments, the Paperwork Reduction Act, could be Since this rule is exempt from notice identified by number SBA–2021–0002 completed. and comment, SBA is not required to through the Federal eRulemaking Portal: Regulatory Flexibility Act (RFA) conduct a regulatory flexibility analysis. http://www.regulations.gov. Follow the instructions for submitting comments. The Regulatory Flexibility Act (RFA) Authority: 15 U.S.C. 636(a)(36); Coronavirus Aid, Relief, and Economic SBA will post all comments on generally requires that when an agency Security Act, Pub. L. 116–136, section 1114 www.regulations.gov. If you wish to issues a proposed rule, or a final rule and Economic Aid to Hard-Hit Small submit confidential business pursuant to section 553(b) of the APA or Businesses, Nonprofits, and Venues Act (Pub. information (CBI) as defined in the User another law, the agency must prepare a L. 116–260), section 303. Notice at www.regulations.gov, please regulatory flexibility analysis that meets send an email to [email protected]. All the requirements of the RFA and Jovita Carranza, Michael Faulkender, Assistant Secretary for Economic Policy. other comments must be submitted publish such analysis in the Federal through the Federal eRulemaking Portal [FR Doc. 2021–00451 Filed 1–12–21; 4:15 pm] Register. 5 U.S.C. 603, 604. Specifically, described above. Highlight the the RFA normally requires agencies to BILLING CODE 8026–03–P information that you consider to be CBI describe the impact of a rulemaking on and explain why you believe SBA small entities by providing a regulatory SMALL BUSINESS ADMINISTRATION should hold this information as impact analysis. Such analysis must confidential. SBA will review the address the consideration of regulatory 13 CFR Parts 120 and 121 information and make the final options that would lessen the economic determination whether it will publish effect of the rule on small entities. The [Docket No. SBA–2021–0002] the information. RFA defines a ‘‘small entity’’ as (1) a FOR FURTHER INFORMATION CONTACT: Call proprietary firm meeting the size RIN 3245–AH63 standards of the Small Business Center Representative at 833–572–0502, Administration (SBA); (2) a nonprofit Business Loan Program Temporary or the local SBA Field Office; the list of organization that is not dominant in its Changes; Paycheck Protection offices can be found at https:// field; or (3) a small government Program Second Draw Loans www.sba.gov/tools/local-assistance/ jurisdiction with a population of less districtoffices. AGENCY: U.S. Small Business than 50,000. 5 U.S.C. 601(3)–(6). Except SUPPLEMENTARY INFORMATION: Administration. for small government jurisdictions with I. Background Information a population of less than 50,000, neither ACTION: Interim final rule. State nor local governments are ‘‘small On December 27, 2020, President SUMMARY: This interim final rule entities.’’ Trump signed the Economic Aid to The requirement to conduct a announces the implementation of Hard-Hit Small Businesses, Nonprofits, regulatory impact analysis does not section 311 of the Economic Aid to and Venues Act (the Economic Aid Act) apply if the head of the agency ‘‘certifies Hard-Hit Small Businesses, Nonprofits, (Pub. L. 116–260) into law to provide that the rule will not, if promulgated, and Venues Act (the Economic Aid Act). continued assistance to individuals and have a significant economic impact on The Economic Aid Act authorizes the businesses that have been financially a substantial number of small entities.’’ U.S. Small Business Administration to impacted by the ongoing coronavirus 5 U.S.C. 605(b). The agency must, guarantee additional loans under the pandemic. Section 311 of the Economic however, publish the certification in the temporary Paycheck Protection Aid Act added a new temporary section Federal Register at the time of Program, which was originally 7(a)(37) to the Small Business Act (15 publication of the rule, ‘‘along with a established under the Coronavirus Aid, U.S.C. 636(a)(37)). This new section statement providing the factual basis for Relief, and Economic Security Act to authorizes the U.S. Small Business such certification.’’ If the agency head provide economic relief to small Administration (SBA or the has not waived the requirements for a businesses nationwide adversely Administration) to guarantee Paycheck regulatory flexibility analysis in impacted under the Coronavirus Disease Protection Program Second Draw Loans accordance with the RFA’s waiver 2019 (COVID–19) Emergency (PPP Second Draw Program), under provision, and no other RFA exception Declaration (COVID–19 Emergency generally the same terms and conditions applies, the agency must prepare the Declaration) issued by President Trump available under the Paycheck Protection regulatory flexibility analysis and on March 13, 2020. Section 311 of the Program (PPP) established under section publish it in the Federal Register at the Economic Aid Act adds a second 7(a)(36) of the Small Business Act (15 time of promulgation or, if the rule is temporary program to SBA’s 7(a) Loan U.S.C. 636(a)(36)). Under section 311, promulgated in response to an Program titled, ‘‘Paycheck Protection SBA may guarantee loans under the PPP emergency that makes timely Program Second Draw Loans.’’ This Second Draw Program through March compliance impracticable, within 180 interim final rule implements the key 31, 2021 (‘‘Second Draw PPP Loans’’) to days of publication of the final rule. 5 provisions of section 311 of the borrowers that previously received a U.S.C. 604(a), 608(b). Economic Aid Act and requests public PPP loan under section 7(a)(36) of the Rules that are exempt from notice and comment. Small Business Act (‘‘First Draw PPP comment are also exempt from the RFA DATES: Loans’’) and have used or will use the requirements, including conducting a Effective Date: This interim final rule full amount of the initial PPP loan for regulatory flexibility analysis, when is effective January 12, 2021. authorized purposes on or before the among other things the agency for good Applicability Date: This interim final expected date of disbursement of the cause finds that notice and public rule applies to loan applications and Second Draw PPP Loan. procedure are impracticable, applications for loan forgiveness Like First Draw PPP Loans, Second unnecessary, or contrary to the public submitted for Paycheck Protection Draw PPP Loans are intended to provide interest. Small Business Program Second Draw Loans. expeditious relief to America’s small

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