The U.S. Treasury Department and the SBA on Friday released additional guidance regarding the Paycheck Protection Program. President Donald Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on Friday, April 24. The SBA resumed accepting PPP loan applications today at 10:30 a.m.
The new PPP guidance includes recommendations regarding the following:
- Requirements for promissory notes and authorizations, indicating that lenders may use their own promissory note or an SBA form of promissory note.
- Clarifications regarding eligible businesses include:
- hedge funds and private equity firms primarily engaged in investment or speculation are not eligible;
- affiliation rules apply to private equity owned-businesses;
- hospitals otherwise eligible shall not be rendered ineligible due to ownership by a state or local government if the hospital receives less than 50% of its funding from state or local government sources, exclusive of Medicaid;
- clarifications on gaming businesses eligibility;
- business participation in employee stock ownership plans does not trigger affiliation rules; and
- businesses involved in bankruptcy proceedings are ineligible.
- Limited safe harbor regarding borrower certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
The full guidance can be accessed on the U.S. Treasury Department’s website.