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Unpacking the Economic Aid Act: Consolidated First Draw PPP Interim Final Rule, New First Draw PPP Loans, and Increases to First Draw PPP Loans (January 14, 2021)
Late 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.
Highlights
The Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act), which was part of the Consolidated Appropriations Act, 2021 package, made various changes to the Paycheck Protection Program (PPP) that affect all PPP loans including those funded under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The Economic Aid Act opens a new PPP loan period for first loans and implements a second loan draw for certain PPP borrowers, each through March 31, 2021.
President Donald Trump signed the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act), which was included in the Consolidated Appropriations Act, 2021, on Dec. 27, 2020. In turn, the U.S. Small Business Administration (SBA) published a new consolidated Interim Final Rule (IFR) on Jan. 6, 2021, relating to the Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as revised by the Econ