SBA Paycheck Protection Program Update
Late last night, the U.S. Department of the Treasury issued guidance in response to AGC’s concerns regarding the SBA Paycheck Protection Program eligibility criteria, found HERE. That guidance includes the following:
Question: Does my business have to qualify as a small business concern (as defined in section 3 of the Small Business Act, 15 U.S.C. 632) in order to participate in the PPP?
Answer: No. In addition to small business concerns [which in construction are generally determined by an average gross annual income test], a business is eligible for a PPP loan if the business has 500 or fewer employees whose principal place of residence is in the United States, or the business meets the SBA employee-based size standards for the industry in which it operates (if applicable).
The new guidance also states that “[b]orrowers . . . may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act” and its interim final rule. At the time it posted this guidance, the Treasury Department also made a point of reaching out to AGC and notifying the association of its action. HERE is a copy of that notice.
While the new Treasury Department guidance appears to clear the way for construction firms that employ 500 or fewer people to qualify for the new Paycheck Protection Program loans, its fix is, at best, procedurally sloppy. AGC will work with the SBA to ensure its regulations and guidance are harmonized with this Treasury guidance.