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SBA and U.S. Treasury Issue Interim Final Rule on Paycheck Protection Program Loan Forgiveness | Hinshaw & Culbertson LLP


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On December 28, 2020, former President Trump signed the Consolidated Appropriations Act. Over 5,000 pages in length, the legislation (referred to herein as the Economic Aid Act) included revisions and additions to the Paycheck Protection Program (PPP). The new PPP will: (1) accept PPP loan applications from eligible borrowers that did not receive a PPP loan under the earlier program (known as First Draw Loans ); (2) permit qualifying businesses that received a PPP loan under the earlier program to receive a second PPP loan (known as Second Draw Loans ); (3) allow existing PPP borrowers not eligible for a Second Draw Loan to spend any remaining PPP funds on permitted expenses, which include additional forgivable expenses; and (4) change PPP rules for existing PPP borrowers, new PPP borrowers, and second draw borrowers in the areas of eligibility, forgivable expenses, and loan forgiveness. ....

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Lender Obligations Under the Revived Paycheck Protection Program | Hinshaw & Culbertson LLP


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On December 28, 2020, former President Trump signed the Consolidated Appropriations Act. Over 5,000 pages in length, the Act included revisions and additions to the Paycheck Protection Program (PPP).
The new PPP will: (1) accept applications from eligible borrowers for PPP loans that did not receive a PPP loan under the earlier program known as a First Draw Loan ; (2) permit qualifying businesses that received a PPP loan under the earlier program to receive a second PPP loan known as a Second Draw Loan ; (3) allow existing PPP borrowers not eligible for a Second Draw Loan to spend any remaining PPP funds on permitted expenses, which include additional forgivable expenses; and (4) change PPP rules for existing PPP borrowers, new PPP borrowers, and Second Draw Loan borrowers in areas of eligibility, forgivable expenses, and loan forgiveness. ....

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Paycheck Protection Program - What Has Changed? | Stinson LLP


Five-year maturity
All guidance issued in connection with First Draw Loans applies to Second Draw Loans, except as specified in the new guidance applicable to Second Draw Loans.
SBA Guaranty
As with First Draw Loans, Second Draw Loans are subject to an SBA guaranty of 100% of Second Draw Loans. As a result, a lender who makes Second Draw Loan will not bear the financial risk of non-payment, as long as the lender complies with its obligations under the program.
Eligibility
Eligibility for Second Draw Loans is much more limited than for First Draw Loans. To be eligible an applicant must be a business concern, nonprofit organization, housing cooperative, veterans organization, tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that (i) employs not more than 300 employees, (ii) experienced a 25% or greater reduction in gross receipts for at least one quarter in 2020 as compared to t ....

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SBA Releases Trio of New Interim Final Rules Addressing Eligibility, Forgiveness, and SBA Review of First Draw and Second Draw PPP Loans | Hodgson Russ LLP


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The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Economic Aid Act”) was adopted on December 27, 2020, extending the availability of the original First Draw Paycheck Protection Program (“PPP”) Loans through March 31, 2021. It also created a new Second Draw PPP Loan program (“PPP2”) allowing prior PPP borrowers to seek a second loan.  The Economic Aid Act required the SBA to issue initial regulations within ten days of enactment to carry out the provisions of the Act and amendments to the PPP and, on January 6, 2021, the SBA posted two new Interim Final Rules (“IFRs”) to its website.  ....

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