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Unpacking the Economic Aid Act and American Rescue Plan Act: Consolidated First Draw PPP Interim Final Rule, New First Draw PPP Loans, and Increases to First Draw PPP Loans
On January 6, 2021, the Small Business Administration (the “
SBA”) and the Department of Treasury released an Interim Final Rule called “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid Act” (sometimes referred to as the “
Consolidated First Draw PPP IFR” or the “
IFR”). That rule restates existing regulatory provisions into a single regulation on borrower eligibility, lender eligibility, and loan application or origination requirement issues for new First Draw PPP Loans, as well as general rules relating to First Draw PPP Loan increases and loan forgiveness.
The National Restaurant Association estimates that from March 2020 through April of this year 110,000 restaurants have closed either permanently or long-term.
More help is on the way: On Tuesday, April 27, the Small Business Administration announced it was opening registration for its Restaurant Revitalization Fund beginning Friday, April 30, and opening applications the following Monday. The.
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The $1.9 trillion American Rescue Plan Act of 2021 (ARP), signed
into law on March 11, 2021, includes a $28.6 billion Restaurant Revitalization Fund (RRF) administered by
the Small Business Administration (SBA). The RRF provides economic
relief to eligible restaurants. The RRF is similar to the Paycheck
Protection Program (PPP), but RRF amounts are based on lost revenue
rather than payroll, and the program is administered directly by
the SBA rather than through bank loans guaranteed by the SBA.
RRF Eligibility
The ARP broadly defines eligible entities as a restaurant,