April 2, 2020
By: Caity Witucki
BREAKING NEWS – SBA Provides Additional Guidance on Paycheck Protection Program
On April 2, 2020 around 7:00 PM Eastern, the Small Business Administration (SBA) issued additional guidance for SBA lenders.
- The Interest Rate on PPP loans has been changed from 0.5% to 1% (page 11).
- Borrowers are ineligible for a PPP loan if: they are engaged in illegal activity, are a household employer, were recently incarcerated or convicted of a felony, are delinquent on a federal loan or have defaulted on a federal loan within the last seven years (page 7).
- Any compensation paid to an employee or sole proprietor in excess of an annual salary of $100,000 must be subtracted from aggregate payroll costs when determining the maximum loan amount (page 8).
- Sole proprietors, independent contractors and self- employed individuals are eligible for PPP loans (page 6). However, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan forgiveness (page 15).
- “Nothing in [SBA nondiscrimination regulations] shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities” (page 28).
SBA will provide further guidance through SBA notices and a program guide which will be posted on SBA’s website at www.sba.gov.
Questions on the Paycheck Protection Program 7(a) Loans may be directed to the Lender Relations Specialist in the local SBA Field Office. The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices.