More PPP Guidance from the Small Business Administration

The Small Business Administration issued more guidance about the Paycheck Protection Program earlier this week.

The new rules provide more details about forgiveness appeals, how PPP loans and Economic Injury Disaster Loans interact, and vision and dental benefits.

Since banks and other lenders just started accepting loan forgiveness applications, the new guidance is timely.

Here’s a high-level overview of the latest rules:

• For PPP loan forgiveness apps that have been denied: The process is a legal one, and a borrower’s representation is limited to attorneys. That means your CPA or accountant can’t represent you if your PPP forgiveness is denied and you opt to appeal.
• For PPP loans and EIDL advances: If a borrower got an EIDL advance, the SBA will reduce the PPP loan forgiveness amount by the amount of that EIDL advance. The SBA said it will deduct the EIDL amount to the lender who granted the PPP loan.
• For vision and dental benefits: According to the SBA, employer payments toward those benefits fall under payroll costs.

Also, businesses that do appeal will need several pieces of information, including:

• A copy of the loan review decision they’re appealing
• A statement explaining why the decision was wrong
• The relief amount the business is seeking
• Signed copies of payroll tax filings filed with the IRS and the state,
• Various federal tax returns and schedules. These can include Form 1040 with Schedules C or F. Businesses will also need to include individual employee wage reporting and unemployment insurance tax filings for the relevant state during the relevant time. If the business didn’t provide them with the PPP loan app, they’ll need to include of explanation about why they’re not relevant or why the business doesn’t have them.
• The name, address, phone number, email address, and signature of the appellant or attorney. Also, the appeal petition can’t exceed 20 pages, not counting attachments.

Note that this appeal process only applies if the borrower is appealing a SBA decision and if they haven’t remitted the PPP loan amount to the lender.

If a borrower is appealing a lender’s decision or if the SBA has already repaid the lender, the borrower will need to exercise their rights under applicable law against the lender to reverse any kind of decision.

As a reminder, we offer a PPP loan forgiveness solution to help make navigating all of the requirements simpler and more straight forward.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.