UPDATE AS OF MAY 5, 2020 - SBA EXTENDS SAFE HARBOR TO MAY 14, 2020 AND PROMISES FURTHER GUIDANCE PRIOR TO THEN
The Federal Reserve on April 9, 2020 announced the basic preliminary terms of its Main Street Lending Program ("MSLP") authorized under the CARES Act. The MSLP will enhance support for small and mid-sized businesses "that were in good financial standing before the crisis" by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion.
On April 2, 2020, the SBA issued an "Interim Final Rule" providing interpretations and guidance for loans under the Payroll Protection Program ("PPP"). The interim rule is effective immediately despite the fact that the SBA will continue to take comments for 30 days. This is a first come, first served program that will continue until the earlier of June 30, 2020, or until the funds are exhausted. Secretary Mnuchin has indicated the President will request additional funds if the initial $350 billion is over-subscribed. Read more. Changes to PPP in SBA's Interim Final Rule.docx
On Thursday, April 2, 2020, the U.S. Small Business Administration (SBA) issued an Interim Final Rule (IRF), which constitutes the much-anticipated "Regulations" called for in the CARES Act on implementation of the Paycheck Protection Program (PPP). While the IRF is considered "interim" and requests public comments over a 30-day period, it is anticipated that lenders will rely on it once they begin accepting and processing applications for those small businesses seeking PPP loans. We previously explained the program in our blog post found here.
Your business is or will be under unprecedented pressure. We have created the Resource Center to provide you with critical tools to manage through this uncertainty, including a Toolkit, Cash Flow Projection template, and essential information for accessing government programs such as the Economic Injury Disaster Loans and the new Paycheck Protection Program included in the CARES Act.