Since the enactment of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020, the U.S. Small Business Administration (the “SBA”) and the U.S Treasury Department (“Treasury”) have issued a sizable number of rules and additional guidance to implement the CARES Act’s marquee small business loan component – the Paycheck Protection Program (the “PPP”).
To date, the SBA and Treasury have issued a number of Interim Final Rules governing the PPP (collectively, the “PPP Rules”).i In addition, the SBA and Treasury have also published: borrower (SBA Form 2483) and lender (SBA Form 2484) application forms; program “fact sheets” for borrowers and lenders; a summary of the applicable affiliation rules; a forgiveness application form (SBA Form 3508) and simplified forgiveness application (SBA Form 3508EZ) for certain borrowers; and responses to certain Frequently Asked Questions (“FAQ”) (which the SBA has updated numerous times). This changing regulatory environment has made it difficult for borrowers to avail themselves of the program with certainty as to their eligibility and scope of available benefits, primarily their ability to obtain forgiveness for all or part of their loans. This alert (I) summarizes the key terms of the PPP, (II) addresses certain frequently asked questions that Proskauer attorneys have been assessing, and (III) provides an overview of the Federal Reserve’s Paycheck Protection Program Lending Facility, which is aimed at helping participating lenders originate more loans under the PPP loan for the many businesses, non profits and other eligible organizations in need of financial relief as a result of COVID-19.
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