Details related to the Paycheck Protection Program (PPP) continue to evolve. First it appears that Congress is poised to provide additional funding for the program. Also, the Small Business Administration continues to relax the rules to make it easier for financial institutions to participate.
The new $349 billion program was part of the CARES Act. All insured financial institutions can offer the PPP immediately, even if the institution is not a SBA certified lender.
On April 7th Treasury Secretary Mnuchin asked Congress to commit an additional $250 billion to replenish the new $349 billion small-business program that is being overwhelmed by surging demand. Although billions have been lent already, it is not too late to jump into this new program
The SBA has issued an Interim Final Rule for the program. Additional guidance in the form of a Frequently Asked Questions document is being continuously updated. Two recent relief-providing clarifications involve:
- Affiliation rules. Those rules are one of the most complex aspects of the PPP. Allowing lenders may rely on borrower certifications as to the applicability of affiliation rules significantly reduces the burden.
- Beneficial ownership. Lenders do not need to re-verify beneficial ownership information for existing customers. If the lender has not yet collected beneficial ownership information on an existing customer, they are not required to do so when that customer applies for PPP loans, unless the lender’s risk-based BSA compliance program indicates otherwise.
Compliance Resource conducted a comprehensive webinar, entitled A Guide to the SBA Paycheck Protection Program, on April 6, 2020. A recording of the program is immediately available. In addition to the recording, purchasers receive a 40-page manual, and PowerPoint slides. Answers to any questions regarding the PPP may be submitted to Compliance Resource’s Pandemic Relief Issues Forum, where timely answers are provided.