On Thursday April 2, 2020, the Small Business Administration (SBA) issued an interim final rule describing how it interprets the Paycheck Protection Program (PPP) and other related SBA loan provisions of the CARES Act. The interim rule clarified some, but not all, of the open issues related to the administration of the PPP loan program.
The interim rule provides the following:
The Interim Final Rule confirmed that the SBA’s affiliation rules will apply to PPP loan applications. According to the Interim Final Rule, the SBA will be issuing a guidance promptly on how to apply those rules. The affiliation rules generally require a company to count its own employees, plus the employees of its foreign and domestic affiliates to determine whether the entity qualifies for a PPP loan. The affiliation rules are complicated and specific to the SBA. If you have concerns about the affiliation rules, please contact Ford Turrell, Tim Hillegonds, Rob Davies, Matt Crowe or your Warner attorney.
