The Small Business Administration on May 22 released interim final rules related to the Paycheck Protection Program. The rules outline procedures for borrowers to calculate costs eligible for loan forgiveness in the PPP, how the SBA will review individual loans for forgiveness, and details of the loan forgiveness process for lenders.
The interim final rules stipulate that:
- SBA retains the right to review any loan during the forgiveness application process.
- Loan recipients must retain relevant documentation for six years.
- Full-time equivalent calculations are based on 40 hours per week.
- A reduction in an employee's hours will not count against a borrower for the salary calculation. Such cases should be counted as a full-time equivalent calculation reduction.
NATSO members are advised to discuss their own specific scenarios with their accountant, counsel, and/or banking representative.
Notably, eligibility for loan forgiveness will be assessed based on rules / guidance in place on the date of a borrower's forgiveness application. NATSO anticipates additional FAQ guidance and clarifications from SBA on these provisions, and expects Congress to take steps to make the program more accommodating for employers.
NATSO members may log in to read a detailed summary of the PPP interim final rules.