SBA and Treasury Issue New PPP Materials and Guidance

Recently, the U.S. Small Business Administration (SBA) and Treasury issued materials/guidance concerning the Paycheck Protection Program (PPP). They are:

1. An SBA Procedural Notice addressing changes of ownership for entities having received a PPP loan. Among other stipulations, the Notice includes, “Regardless of any change of ownership, the PPP borrower remains responsible for (1) performance of all obligations under the PPP loan, (2) the certifications made in connection with the PPP loan application, including the certification of economic necessity, and (3) compliance with all other applicable PPP requirements.”

2. An announcement from the IRS about reporting requirements for forgiven PPP loans. IRS states: “When all or a portion of the stated principal amount of a covered loan is forgiven because the eligible recipient satisfies the forgiveness requirements under section 1106 of the CARES Act, an applicable entity is not required to, for federal income tax purposes only, and should not, file a Form 1099-C information return with the IRS or provide a payee statement to the eligible recipient under section 6050P of the Code as a result of the qualifying forgiveness.”

3. A simpler loan forgiveness application for loans of $50,000 or less

  • Click here for the simpler loan forgiveness application.
  • Click here for instructions for completing the simpler loan forgiveness application.
  • Click here for the Interim Final Rule on the new, simpler loan forgiveness application.
  • Click here for more on the PPP from SBA.

4. An update to the SBA frequently asked questions (Question #52), addressing deferral periods for borrower payments of principal, interest, and fees related to PPP loans in light of the PPP Flexibility Act.

5. A letter from SBA to forgiveness Platform Authorizing Officials (AOs), noting SBA has started remitting PPP loan forgiveness payments to lenders.

If you believe this information is pertinent to your business, VADA suggests you consult your controllers, outside accountants, and legal counsel.