Interim final rule: PPP loan forgiveness process, appeals deferment (COVID-19)

Interim final rule intended to streamline the forgiveness process for PPP loans of $150,000 or less

Intended to streamline the forgiveness process for PPP loans of $150,00 or less

The Small Business Administration (SBA) this afternoon released for publication in the Federal Register an interim final rule to implement measures related to the forgiveness of loans made under the Paycheck Protection Program (PPP).

Background

The Paycheck Protection Program (PPP), as administered by the SBA, was intended to offer economic relief for businesses affected by the coronavirus (COVID-19) pandemic.

PPP provided financial support lending for small and large businesses under measures that were originally included in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. No. 116-136). Additional measures concerning the program were enacted under the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260) (specifically in one of the titles to the legislation, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act). That legislation effectively opened up the availability for a “second draw” for PPP loans.

The PPP was scheduled to expire March 31, 2021. President Biden on March 30, 2021, signed legislation (Pub. L. No. 117-6) that extended the PPP through June 30, 2021. 

SBA interim final rule

Today’s interim final rule [PDF 262 KB] (as published in the Federal Register on July 30, 2021) is intended to streamline the forgiveness process for PPP loans of $150,000 or less by:

  • Allowing lenders to use a “COVID revenue reduction score” at the time of forgiveness to document the required revenue reduction for second draw PPP loans
  • Establishing a direct-borrower forgiveness process for lenders that choose to opt-in as an alternative method of processing loan forgiveness applications

The interim final rule also extends the loan deferment period for PPP loans when the borrower timely files an appeal of a final SBA loan review decision with the SBA Office of Hearings and Appeals.

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.