SBA issues guidelines on PPP loan cancellation
The Small Business Administration and the Treasury Department have quietly released more guidance for the paycheck protection program as lawmakers seek to make more fixes to the emergency loan program.
One of the draft final rules, released late Friday evening, focused on the PPP loan cancellation conditions. The other rule provided guidance on lender obligations during the forgiveness period, as well as the SBA process for loan review.
Banks will be required to render decisions on borrowers’ rebate requests within 60 days of receipt. The SBA said it would then pay lenders within 90 days.
The SBA has said it has the right to review any loan, although it will assess them on the basis of “rules and guidance available at the time of the borrower’s PPP loan application.” appeal procedure for borrowers.
Lenders will lose fees on any loan deemed ineligible, and the SBA has said it may recoup fees already issued. The rules also described more qualifications for salary expenses and established limits on the amount of loan forgiveness available to owner-employees.
Bankers seemed unimpressed with the latest guidelines, which did not extend the time borrowers have to use the funds beyond its current eight-week period. Nor have the rules reduced the payroll requirement, which currently stands at 75% of PPP funds.
“Just another Friday night where [SBA and Treasury] continue to muddy the waters to make it as complicated as possible to obtain forgiveness and the bankers to manage it, ”Brad Bolton, president and CEO of Community Spirit Bank in Red Bay, Alabama, tweeted the Saturday.
Several other bankers quickly accepted Bolton’s assessment.
“They made us do a bunch of business loans that didn’t qualify with the old ‘don’t worry’ and now it’s our turn,” mentionned Ken Clayton, President and CEO of Western Bank in Artesia, NM
Lawmakers, meanwhile, are considering bills that would give borrowers up to 24 weeks to deploy P3 funds and allow them to spend more than a quarter of the money on non-salary expenses. The Senate and the House have different proposals under consideration.