First revisions to PPP rules issued

The SBA has posted a "Paycheck Protection Program Interim Final Rule on Revisions to First Interim Final Rule" with changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act. The SBA also published updated, streamlined application forms for borrowers and lenders to use for loans made on or after June 5, 2020.

The rule:

• Confirms that borrowers that use less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will still be eligible for partial loan forgiveness.
• Extends the end date of the “covered period” for a PPP loan from June 30, 2020 to December 31, 2020.
• Provides a five-year maturity for loans made on or after June 5, 2020, and provides that terms on loans made prior to that date may be extended from two years to five years at the mutual agreement of the borrower and lender.
• Extends the loan forgiveness period from eight weeks to 24 weeks. (For loans made prior to June 5, 2020, borrowers may choose to keep the forgiveness period at eight weeks.)
• Clarifies that if a borrower submits a forgiveness application within ten months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date SBA pays the forgiven amount to the lender.
• Reiterates that the last day a lender can obtain an SBA loan number for a program loan is June 30, 2020.