Many businesses are actively trying to determine how to count employees for purposes of determining whether they can avail themselves of the loan and grant stimulus provided by the Paycheck Protection Program (PPP) in Sections 1102 and 1106 of the CARES Act.We summarized the PPP program here.Basically, the PPP expands the SBA 7(a) loan program to allow “eligible entities” to … Many of the people and companies that received a PPP loan already know and navigated these rules. Under section 1102 of the CARES Act, certain provisions regarding the issuance and use of PPP loans are limited to the “covered period.” “Covered period,” as that term is used in section 1102 of the CARES Act, was originally defined as the period from February 15, 2020, to June 30, 2020. However, following those rules does not mean the Government will discharge your PPP loan. Paycheck Protection Program (PPP) - CARES Act Section 1102 & Small Business Administration (Economic Injury Disaster Loan) March 30, 2020 - The $2.2 trillion coronavirus stimulus bill was enacted by Congress on March 27, 2020. Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . endobj %PDF-1.7 PPP agents assist borrowers in preparing and submitting a PPP loan application to a PPP lender who, in turn, will fund the loan to the borrower. It says the borrower has to certify that “the eligible … stream Paycheck Protection Program Flexibility Act of 2020. � ���Y��4�`4�/�"k��y�O1i�R�ID��U/��X���8���Ȉ��w����x�f!�"�/�E. �5>ǁ������vrC�8��\$g�$$U�IUrJ�L���z�����l����[Qy����f���7���W�V�0�����N>]��?���|i.t��� The amount of PPL Loan forgiveness allowed for a borrower is the amount equal to the sum of costs incurred and payments made in the “covered period” of the eight weeks after a PPP Loan is originated for (1) payroll costs. However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … Section 1102 of the CARES Act provides for US$349 billion in funding for loans through the PPP, an expansion of the SBA’s existing 7(a) loan program 1 aimed at supporting small businesses and encouraging those businesses to retain their workers. On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation 2 0 obj For-profit businesses Paycheck Protection Program – Section 1102 The bill establishes a new guaranteed loan program at SBA for small businesses to cover payroll during the immediate crisis. Section 1102 of the Act establishes the PPP as a temporary addition to the SBA’s 7(a) loan program. The PPP is designed to assist small businesses nationwide adversely impacted by the coronavirus pandemic. Under section 1102 of the CARES Act, a PPP Loan will be assigned a risk weight of zero percent under the risk-based capital rules of the federal banking agencies. Section 1102 of the CARES Act contained many rules that prevented many people from obtaining a PPP loan. 1102 PAYCHECK PROTECTION PROGRAM – QUICK REFERENCE In General The CARES Act creates a new loan product under the SBA’s 7(a) Loan Program, the “Paycheck Protection Program” (PPP). That is because Section 1102, by itself, only allows the SBA to issue the PPP loans. Under section 1102 of the CARES Act, a PPP Loan will be assigned a risk weight of zero percent under the risk-based capital rules of the federal banking agencies. The receipt of the loan funds, including PPP funds, are not subject to income tax. Table of contents. 636(a)) that was designed to assist small businesses nationwide adversely impacted by the COVID–19 emergency to pay payroll This section stated that: “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The other main criteria is that you accurately calculated the PPP amount you were entitled to, which is a function of how many … In a May 28 notational vote, the FCA board adopted the 0% risk weight for PPP loans using its authority under 12 CFR § 628.1(d)(3). Section 1102 and 1106 of the CARES Act, established the PPP as a new loan program administered by the U.S. Small Business Administration (SBA) as part of its section 7(a) Loan Program (15 U.S.C. • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. Section 1102 of the CARES Act - Paycheck Protection Program (PPP) SBA Procedural Notice 5000-20028 PPP Lender Processing Fee Payment and 1502 Reporting Process Effective 05/21/2020; SBA Procedural Notice 5000-20036 Updated PPP Lender Processing Fee Payment and 1502 Reporting Process Effective 07/13/2020; ACH CCD+ Addenda Record Layout @�� ��]�d)�KYW"�BIs�K@ 9�q�zT��4�S4 ��~NXU������B�� � Section 1106 of the Act provides for forgiveness of up Express Loans (Act Section 1102) S A loan that’s processed more quickly but with Standard payoff terms Temporary increase in limit for express loans, from $250,000 to $1 million. The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 of the CARES Act) answered a number of questions that borrowers and their legal and accounting advisers had regarding the program. Section 1102 of the CARES Act states that “interest expense related to covered mortgage obligation (related to real or personal property)” and “interest on any other debt obligations that were incurred before the covered period” are allowable uses of the PPP funds. Hospital participation While borrowing rates are established by the lender, the SBA has set a maximum rate of 4% and also prevents any prepayment charges from being assessed against a borrower under this program. However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … [��_fӋ�j4J��M��_�ʳ�5�'yR�_��d5{��N��_}y��� K��2����+�� K$�r^&�,3Γ/�p���2���g&�tT���_�:H�'_����1�_� %ǿL���yt�^�\o�����z������rQfM�TMV�|q�y�rxHV4�KV���O4�t(��|x���}:dr���J ��!�&0^����$p\��:�t endobj %PDF-1.7 The loan is available for employers and 501(c)(3) organizations under 3 0 obj <> Protection Program” in Section 1102, with additional modificatons made by the . Section 1102 provides $350 billion for expedited individual loans up to $10 million through approved lenders that are guaranteed 100 percent by the U.S. government. (a) Definition of covered period.—In this section, the term “covered period” means the period beginning on March 1, 2020 and ending on December 31, 2020. CARES ACT Section 1102 Paycheck Protection Program. Section 1102 of the Act temporarily adds a new product to the U.S. Small Business Administration’s (SBA’s) 7(a) Loan program and Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. 2. 1102. The self-certification requirement—or more accurately, the fluid nature of the self-certification requirement. a. Section 1102 of the CARES Act provided that PPP borrowers who had received an EIDL loan between January 31, 2020 and April 3, 2020, could (and in some circumstances had to) increase their PPP … Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). <> Specifically, some of those FAQs involve explaining the requirements under the Bank Secrecy Act (BSA), and how lenders can meet those requirements when issuing a PPP loan. The PPP is designed to assist small businesses with 500 or fewer employees maintain payroll and pay for qualified expenses during the coronavirus quarantine period. ^�T��{h\ܨ4v�����ϯ��0�$j�U�_�R����s������H�vͺA�i�+Q\xi��*}. Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. 2. Forum Moderator; Donors; 5,470 posts; State:--Report; Share; Posted April 4. This pr ogram is administered by the . PPP loans are limited to the “covered period.” “Covered period,” as that term is used in section 1102 of the CARES Act, was originally defined as the period from February 15, 2020, to June 30, 2020. 3 0 obj PAYCHECK PROTECTION PROGRAM . <>/Metadata 92 0 R/ViewerPreferences 93 0 R>> The goal of this program is to enable employers to carry their payroll and other operating costs through this crisis. Banks will need the following financial information in order to process the SBA loan application. Section 1102 of the CARES Act creates the Paycheck Protection Program, which provides $349 billion in loan assistance to small businesses and nonprofits in 2020, on a first-come, first-served basis. Under section 1102 of the CARES Act, certain provisions regarding the issuance and use of PPP loans are limited to the “covered period.” “Covered period,” as that term is used in section 1102 of the CARES Act, was originally defined as the period from February 15, 2020, to June 30, 2020. Posted April 4. jklcpa. This article summarizes sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”) as clarified by the interim rules issued by the U.S. Small Business Administration, the named Administrator under the Act (the “SBA” or “Administrator”). <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> <> x��=ko�H���?���B\D��f��@���Y��d�I���� ۊ-D�=��ć��WU�$ْl�5� ��棪��]����j=�:=_'?��v�^Oϯfɯo���������ۏ���r���,�~�? You are not required to apply with any specific lender. Section 1102 of the CARES Act provides for US$349 billion in funding for loans through the PPP, an expansion of the SBA’s existing 7(a) loan program 1 aimed at supporting small businesses and encouraging those businesses to retain their workers. Paycheck Protection Program (PPP) (Section 1102; Section 1106): The PPP, which is administered through local lenders by the Small Business Administration (SBA), makes $349 billion available to eligible businesses in the form of guaranteed and potentially forgivable loans. The SBA loans under Section 1102 of the CARES Act (sometimes referred to as “7(a) Loans”) which are eligible for forgiveness are available to employers with less than 500 employees. Section 1102 and 1106 of the CARES Act, established the PPP as a new loan program administered by the U.S. Small Business Administration (SBA) as part of its section 7(a) Loan Program (15 U.S.C. Paycheck Protection Program – Section 1102 The bill establishes a new guaranteed loan program at SBA for small businesses to cover payroll during the immediate crisis. x��[�o��7��a�C���cI�+�9�h�4�qd���*RB�ι}gf�䒻��t�G)�ff�{F����/ߟ�{#��~�ߜ�o�G�L�_�R� �:]s|��_��������˷J�����#7%B�2�I��2�d W��M�*�M7����~|�9����'E$E|�E��,�H|)�����?��~��jY��!2�����^0a�,A����2�a��+q�K.�2�eu��>.�I��?�Q>��ʗP>]�~�D=�B��T?��1�.н%��O�I��4��K! endobj Can be combined with PPP loan and PPP loan forgiveness, but this debt relief does not apply to a PPP loan. ���/�z. Sec. 116-136) and generally allows businesses with fewer than 500 employees to borrow up to $10 million. Under the Paycheck Protection Program, a recipient of a covered loan may use the proceeds to pay (1) payroll costs, (2) certain employee benefits relating to healthcare, (3) interest on mortgage obligations, (4) rent, (5) utilities, and (6) interest on There is one main requirement, governed under section 1102 of the CARES Act that brought the PPP into effect. Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . Hospital participation in Small Business Administration (SBA) programs is typically limited by revenue. As the administrator of the BSA, Section 1102 of the CARES Act established the Paycheck Protection Program (PPP) whereby federal guaranteed loans were made to businesses with not more than 500 employees, as well as nonprofit organizations, veterans organizations, tribal concerns, and self-employed individuals. Under section 1102 of the CARES Act, a seasonal employer may determine its maximum loan amount for purposes of the PPP by reference to the employer’ average total monthly payments for payroll “the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.” Section 1102 also waives SBA fees for borrowers and lenders, and provides processing fees to the lender from the SBA for servicing the loan. Section 1102 of the Act temporarily adds a new product, titled the “Paycheck Protection Program,” to the U.S. Small Business Administration's (SBA's) 7(a) Loan Program. References. The PPP is designed to assist small businesses with 500 or fewer employees maintain payroll and pay for qualified expenses during the coronavirus quarantine period. (a) IN GENERAL.—Section 7(a) of the Small Business Act (15 U.S.C. 4 0 obj For example, a business may wish to use the Paycheck Protection Program (PPP) established pursuant to sections 1102 and 1106 of the CARES Act for certain relief and request agency support under section 3610 for other relief. SBA/For Lenders - Reporting Section 1102 of the CARES Act - Paycheck Protection Program (PPP) SBA Procedural Notice 5000-20028 PPP Lender Processing Fee Payment and 1502 Reporting Process Effective 05/21/2020; SBA Procedural Notice 5000-20036 Updated PPP Lender Processing Fee Payment and 1502 Reporting Process Effective 07/13/2020; ACH CCD+ Addenda Record Layout 3. SBA has published information about the PPP in interim final rules available at 85 FR 20811 (April 15, 2020); 85 FR 20817 (April 15, 2020); and 85 FR 21747 (April 20, 2020). 2 Quote; Link to post Share on other sites. Paycheck Protection Program (Sections 1102 and 1106) — Sections 1102 and 1106 of the CARES Act amend Section 7(a) of the Small Business Act (SBA) to create a new program that provides for up to $349 billion in funding to small businesses through federally guaranteed loans. Paycheck Protection Program (PPP) Loans (Act Section 1102) Potentially forgivable loan for businesses to continue paying employees For small- to medium sized business; payments deferred for six months; no collateral and no guarantee For-profit, nonprofits, sole proprietors (w/ or w/o employees), ind. Use of PPP Loan Proceeds Under section 1102 of the CARES Act, certain provisions regarding the issuance and use of PPP loans are limited to the ‘‘covered period.’’ ‘‘Covered period,’’ as that term is used in section 1102 of the CARES Act, was originally defined as the period from February 15, 2020, to … CARES ACT - Section 1102 Paycheck Protection Program (PPP) 1502 Dashboard Enrollment for Paycheck Protection Program Lenders The 1502 Dashboard (Dashboard) is available through the Sign In drop-down menu available on the Fiscal Transfer Agent (FTA) homepage, https://colsonservices.bnymellon.com. %���� contractors, and self-employed 500 or fewer employees Apply by June 30, 2020. Written By Betsy Souer. <> Lender agreement to make SBA-guaranteed financing available as part of the CARES Act. <>/Metadata 211 0 R/ViewerPreferences 212 0 R>> Although permissible PPP expenses under Section 1102 of the CARES Act, “interest on any other debt obligations that were incurred before the covered period” are not included as nonpayroll costs in the forgiveness section of the CARES Act nor in the Interim Final Rule. Note: Section 7(a)(36)(O) of the Small Business Act as amended by section 1102(a) of the CARES Act (15 U.S.C. The receipt of the loan funds, including PPP funds, are not subject to income tax. The Paycheck Protection Program was established by section 1102 of the CARES Act. The terms of the CARES Act, along with guidance from the Treasury Department, clearly state that both the PPP lender and agent are to receive a fee for the work they perform in administering the program. The U.S. Small Business Administration has also allowed for Additional Qualified Financial Institutions to be eligible as PPP Lenders under the authority of the U.S. Small Business Administration under CARES Act Section 1102. Short title This Act may be cited as the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. For example, you needed to be “in business” on February 15, 2020. Sec. 1. The Coronavirus Aid, Relief and Economic Security Act (CARES) is an extensive stimulus package. That requirement? SEC. The Paycheck Protection Program would: • Support $349 billion in 100 percent guaranteed, low interest, no fee loans of up to $10 No collateral for first $25,000. PPP loans are limited to the “covered period.” “Covered period,” as that term is used in section 1102 of the CARES Act, was originally defined as the period from February 15, 2020, to June 30, 2020. The PPP was created under section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (P.L. The PPPFA changed the “covered period” under Section 1102 of the CARES Act from “February 15, 2020 to June 30, 2020” to “February 15, 2020 to December 31, 2020”. The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 … Regarding forgiveness of the PPP loans, Section 1106(i) of the CARES Act deems forgiven PPP debt, that would otherwise be included in gross income, to be excluded from gross income. Small Business Administration (SBA), with the support of the Department of Treasury. !7ά�p�����/Z��:M�W���O�_+�-K%P���>e9Q=�C>�p����x�Λ(�7��&�fL@�_���"]���T��U�8QR�C�[���H`�f�R��8��V�H��p��j "*�X��R6�ɯ>�{˚>�Ly%Y� 6��3펪�~���*���akR0sZ�\�Y,��� Noting that “small businesses need to be informed on how to apply for a loan and the terms of the loan under section 1102 of the Act as soon as possible,” the SBA provided that the interim final rule is effective immediately. 1 0 obj Loan forgiveness section 1106 page 19 EDIL section 1110 page 26. Q… Thank you, Dan. Section 1102 of the Act temporarily adds a new product, titled the ‘‘Paycheck Protection Program,’’ to the U.S. Small Business Administration’s (SBA’s) 7(a) Loan Program. I have some anxious clients to talk to next week, this has given me a better understanding to help them. 1102 PAYCHECK PROTECTION PROGRAM – QUICK REFERENCE In General The CARES Act creates a new loan product under the SBA’s 7(a) Loan Program, the “Paycheck Protection Program” (PPP). sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). Most of the requirements work simply. Unfortunately, one of the other murkier requirements has suddenly become terribly problematic. %���� endobj Regarding forgiveness of the PPP loans, Section 1106(i) of the CARES Act deems forgiven PPP debt, that would otherwise be stream 636(a)) that was designed to assist small businesses nationwide adversely impacted by the COVID–19 emergency to pay payroll costs and other covered expenses. Section 1102 of the Act temporarily permits SBA to guarantee 100 percent of 7(a) loans under a new program titled the “Paycheck Protection Program.” Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. PPP is covered in section 1102 page 6. endobj 1 0 obj Section 1102(a)(2)(G), the section outlining the PPP loans, explains the borrower requirements. • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. Short title. 1. On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation An additional $310 billion was allocated under the Enhancement Act. This program provides $349 billion in fully guaranteed SBA loans—which can be forgiven if used in accordance with the Act—for certain eligible small businesses, individuals and non-profit organizations to cover payroll, rent, utility payments, and other limited uses. 4 0 obj jklcpa. Summary. CARES ACT – SEC. Section 5 provides a limited Safe Harbor with respect to certification concerning the need for a PPP loan. Section 1106 of the CARES Act provides for the forgiveness of these PPP Loans in certain circumstances by converting the PPP Loans into grants. The Paycheck Protection Program (PPP) – the program created under Section 1102 of the CARES Act to offer small businesses forgivable loans – has made headlines since its creation. Section 1102 of the CARES Act provided that PPP borrowers who had received an EIDL loan between January 31, 2020 and April 3, 2020, could (and in … CARES ACT – SEC. Apr 4. Although permissible PPP expenses under Section 1102 of the CARES Act, “interest on any other debt obligations that were incurred before the covered period” are not included as nonpayroll costs in the forgiveness section of the CARES Act nor in the Interim Final Rule. The Section 1102 “paycheck protection program” statute sets forth a number of borrower requirements. Section 1102 of the Act temporarily permits SBA to guarantee 100 percent of 7(a) loans under a new program titled the ‘‘Paycheck Protection Program.’’ Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. endobj 2 0 obj <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 9 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Many businesses are actively trying to determine how to count employees for purposes of determining whether they can avail themselves of the loan and grant stimulus provided by the Paycheck Protection Program (PPP) in Sections 1102 and 1106 of the CARES Act.We summarized the PPP program here.Basically, the PPP expands the SBA 7(a) loan program to allow “eligible entities” to … Section 1102, created the PPP under section 7(a) of the Small Business Act. 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