Corporate & Securities Blog

Late on May 15, 2020 the Department of Treasury posted the Paycheck Protection Program Loan Forgiveness Application (“Application”) to its website. The application contains step-by-step instructions with worksheets and schedules to help borrowers calculate the amount of their PPP Loan which is eligible for forgiveness.

On May 13, 2020, the Department of the Treasury (“Treasury”) posted a new update to the Frequently Asked Questions (“FAQs”) it has been periodically updating since passage of the CARES Act.  The new FAQ #46 gives borrowers who, together with their affiliates, have received PPP loans in amounts less than $2 million comfort that the Small Business Administration will not challenge the borrower’s certification that the PPP loan was “necessary” due to economic uncertainty.

On April 30, 2020, the Internal Revenue Service (“IRS”) issued Notice 2020-32 which explains expenses paid with Paycheck Protection Program (“PPP”) loan proceeds are nondeductible for tax purposes to the extent the PPP loan is later forgiven.

Earlier today, the Small Business Administration (“SBA”) published a new Interim Final Rule (“IFR”) which limits the amount of Paycheck Protection Program (“PPP”) loans a “single corporate group” may receive to $20 million in total. This limitation appears to apply only to loan disbursements occurring after April 30, 2020, but borrowers should be aware of the limitation and its interplay with other recent SBA guidance.