SBA Issues Two Interim Final Rules Regarding PPP

SWACCA

On January 14, the U.S. Small Business Administration issued a pair of interim final rules (IFRs) addressing Paycheck Protection Program (PPP) “first draw” loans (a borrower’s first PPP loan) and “second draw” loans (a borrower’s second PPP loan) as amended by the omnibus funding package signed into law on December 27, 2020. 

Under the first IFR, which focuses on first draw PPP loans, the maximum PPP loan remains $10 million. 

Under the second IFR focused on second draw PPP loans, borrowers who already received a first PPP loan are eligible to receive a second PPP loan if the borrower has: (1) 300 or fewer employees; (2) used the full amount of their first PPP loan to pay eligible expenses before a second PPP loan may be received; and (3) experienced a reduction of 25 percent or more in “gross receipts” for any 2020 quarter as compared to the same quarter in 2019.

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