New guidance for Paycheck Protection Program loans
The U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, issued new and revised guidance Friday, June 12, for the Paycheck Protection Program.
This guidance implements the Paycheck Protection Program Flexibility Act (PPPFA), signed into law by President Trump on June 5, and expands eligibility for businesses with owners who have past felony convictions.
The new rule updates provisions relating to loan maturity, deferral of loan payments, and forgiveness provisions.
The eligibility threshold for those with felony criminal histories has been changed. The look-back period has been reduced from five years to one year to determine eligibility for applicants, or owners of applicants, who for non-financial felonies have (1) been convicted; (2) pleaded guilty; (3) pleaded nolo contendere (no contest); or (4) been placed on any form of parole or probation (including probation before judgment).
The period remains five years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance.
The application also eliminates pretrial diversion status as a criterion affecting eligibility.
The SBA issued revised PPP application forms to conform to these changes on SBA's and Treasury's website.
SBA will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the PPPFA in the near future.
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