Emerging Markets Law

SBA Releases Interim Final Rule for PPP Loans of $50,000 or less

Posted In Coronavirus

Coronavirus

The Small Business Administration (SBA) recently released an Interim Rule that primarily affects sole proprietors.

There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans. Approximately 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees (presumably not counting the owner as an employee) or one employee.

In connection with these businesses that have obtained a PPP loan of $50,000 or less, the SBA has issued an alternative Loan Forgiveness Application, SBA Form 3508S for use.  PPP borrowers applying for loan forgiveness on PPP loans with a total loan amount of $50,000 or less, except for those borrowers that together with their affiliates received loans totaling $2 million or greater, can use SBA Form 3508S. A borrower that uses SBA Form 3508S is exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees (section 1106(d)(2) of the CARES Act) or reductions in employee salary or wages (section 1106(d)(3) of the CARES Act) that would otherwise apply

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