SBA just provided more information and fact sheets on the SBA Paycheck Protection Program forgivable loans. These are NOT full implementing regulations, but are helpful and clarify many terms (thankfully, including providing the “right answer” to the $100k question). We are still studying these in detail and still need the final regs, but in the meantime, we have attached:
- A high-level PPL loan summary term sheet, updated to reflect information in the SBA fact sheets (new information is noted in bold in the term sheet); and
- The just-released loan application, which requires:
- Signatures by all holders of 20% or more of the borrower’s equity (plus GPs, etc.) (we are reviewing the impact of this requirement);
- A listing of affiliates and description of the nature of the relationship, which will likely require legal analysis and assistance;
- Copies of 2019 “payroll documentation” (we expect that lenders will also require corporate/entity org docs and tax returns); and
- The expected certifications as to the necessity of the loan due to economic uncertainty and use of proceeds, etc.
Note that applications may be submitted beginning this Friday April 3, so we (and they) have some time, but borrowers can begin completing these and gathering the required info.
NOTE: that the application clarifies the $100K comp question in the hoped-for manner by saying that the measure is “average monthly payroll for 2019 , excluding costs over $100,000 on an annualized basis for each employee.” This is doubly good news because it:
- Means borrowers only exclude $5k for an employee making $100k (and can thus borrow against the first $100k); and
- Uses calendar year 2019 payroll amounts, which should be easier for most borrowers to calculate.
Here are direct links to the SBA resources:
- For a top-line overview of the program CLICK HERE
- If you’re a lender, more information can be found HERE
- If you’re a borrower, more information can be found HERE
- The application for borrowers can be found HERE
We will be in touch with more information, as and when we receive it. Thank you.