In October, the Small Business Administration (SBA) and the Treasury Department issued an Interim Final Rule for borrowers with loans of $50,000 or less under the Paycheck Protection Program (PPP). The terms of the program have evolved since it was first introduced under the Coronavirus Aid, Relief & Economic Security (CARES) Act last spring.
The IFR provides much-needed relief to small borrowers. Those small businesses with loans of $50,000 or less that used PPP funds on qualified expenses will likely be able to have their entire loans forgiven, even if their company experiences a workforce or wage reduction. Qualified expenses include payroll costs, rent, utilities and mortgage interest expenses. Of particular note, as a result of new de minimis exemptions, this group of small borrowers can ignore the Full Time Equivalent (FTE) and wage reduction calculations required for other loan forgiveness applicants.