On April 2, 2020, the U.S. Small Business Administration (SBA) posted an interim final rule announcing the implementation of sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Section 1102 of the CARES Act temporarily adds a new program, titled the “Paycheck Protection Program,” to the SBA’s 7(a) Loan Program. Section 1106 of the CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program (PPP).
The PPP is intended to provide economic relief to small businesses nationwide adversely impacted by the Coronavirus Disease 2019 (COVID-19). Subsequently, SBA published twenty-three interim final rules providing additional guidance on the PPP (some of which were jointly issued with the Department of the Treasury) and the Treasury published one interim final rule. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) became law. The Economic Aid Act extends the authority to make PPP loans through March 31, 2021, and revises certain PPP requirements.
This interim final rule incorporates the Economic Aid Act amendments required to be implemented
On March 27, 2020, the president signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law providing approximately $2 trillion in assistance to individuals and businesses during the COVID-19 pandemic. The CARES Act includes a new loan program called the Paycheck Protection Program – administered through the Small Business Administration (“SBA”) – that provides up to $349 billion in 100% federally-backed loans to eligible employers. This program provides a concise overview of the CARES Act and highlights what firms need to know about funding resources that have been made available.
Learning Objectives:
Understand the purpose of the Paycheck Protection Program (PPP) Loans created by the CARES Act.
Analyze the eligibility, use, repayment, and debt forgiveness requirements of the Paycheck Protection Program Loans
Recognize how the CARES Act adjusted previous requirements of the existing Economic Injury Disaster Loans (EIDL) program administered by the U.S. Small Business Administration
Analyze the eligibility, use, and repayment requirements of the Economic Injury Disaster Loans
Compare and contrast PPP Loans and EIDL loans so participants can determine whether to apply to none, one, or both
