SBA issues rule easing Paycheck Protection Program restrictions

The Small Business Administration today released an interim final rule implementing the Paycheck Protection Program Flexibility Act, AHA-supported legislation enacted last week.

The rule provides additional flexibility for borrowers by extending the loan period through 2020, as well as the timeframe for repayment if required. It also changes the parameters for potential loan forgiveness; allows borrowers to use up to 40% of the loan on non-payroll expenses; provides different scenarios under which borrowers may be eligible for forgiveness; and allows borrowers who seek forgiveness of the loan to qualify for deferred payment of the employer’s portion of certain payroll taxes.

The provisions related to loan forgiveness and deferral periods are effective March 27; the maturity date provision is effective June 5; and the other provisions are effective immediately.

SBA will accept comments on the rule for 30 days after its June 16 publication in the Federal Register.

The Coronavirus Aid, Relief, and Economic Security Act created the program to provide loans to small businesses, primarily to help keep their workers on the payroll.