UPDATED SBA GUIDANCE ON PAYROLL PROTECTION LOANS
Updated SBA Guidance on Payroll Protection Loans
How soon can I apply?
- Starting April 3, 2020 and before June 30, 2020 (or, if earlier, the allocated funding is disbursed) for small businesses and sole proprietorships
- Starting April 10, 2020 and before June 30, 2020 (or, if earlier, the allocated funding is disbursed), for independent contractors and self-employed individuals
What happens if the funds run out?
- There are no funds left and therefore no more PPLs are made unless and until Congress provides additional funding.
So how will SBA lenders prioritize applications?
- We don’t know, though we suspect most banks will prioritize the applications of key customers and those with whom they already have a banking relationship, in addition to a preference for loans which generate the largest fees (i.e. larger loans). Whether the SBA is going to require specified criteria in terms of how to prioritize applications is anyone’s guess. However, we anticipate that the SBA is not likely to do so given the likelihood that implementing that in a meaningful and fair way is likely to lead to further delay.