Overview of IFR Revisions
When a government agency such as the SBA has good reason to issue a final rule before publishing a proposed rule, it issues the rule as an “interim final rule,” or “interim rule.” Interim rules becomes effective as soon as they are published. The SBA’s new Interim Final Rules (described briefly below) were created to implement the PPP Flexibility Act and offer additional guidance to both borrowers and lenders.
Interim Final Rule Revisions to First PPP Interim Final Rule (IFR)
|On June 5, 2020, the PPP Flexibility Act, which amended the CARES Act (see above), was signed into law. This IFR changed key provisions in the CARES Act such as deferral of loan payments, loan maturity, and forgiveness provisions. The provisions related deferral periods and loan forgiveness for PPP loans are effective March 27, 2020. The provision relating to the maturity date of PPP loans is effective June 5, 2020.
PPP Interim Final Rule on Additional Revisions to the First Interim Final Rule
|The purpose of this revision is to modify the IFR posted on SBA’s website on April 2, 2020 to amend the PPP eligibility requirements regarding certain felony charges. Previously applicants with a felony conviction within the past 5 years were not eligible for PPP loans. With this IFR, the time period has been reduced to 1 year unless the applicant or 20% owner is currently subject to an indictment, arraignment, criminal information, or other formal criminal charge, or on probation, parole, or presently incarcerated.
Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules
|On June 16th, the SBA made revisions to the third and sixth IFRs, mainly to conform language to agree with changes made in the Paycheck Protection Program Flexibility Act. The purpose of the third interim final rule is to update the IFR on additional eligibility criteria and requirements for certain loan pledges. The purpose of the sixth interim final rule is to update the IFR on disbursements in light of the amendments under the Flexibility Act. The frequently asked questions (FAQs) regarding the PPP that are posted on SBA’s website and the other IFRs will help with the understanding of these and all IFRs.
For updates on legislation that affects your business, please visit the CGA COVID-19 Business Resources Page on our website.
If you have questions about the PPP or any other federal stimulus program, please contact a CGA Business Law Attorney.
For assistance reopening your business, please contact a CGA Labor and Employment Law Attorney.
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