Paycheck Protection Program Updates
Interim Final Rule on Revisions to Loan Forgiveness, Review Procedures Interim Final Rules
- the original loan forgiveness rules,
- the deferral period and forgiveness,
- payroll costs eligible for loan forgiveness,
- non-payroll costs eligible for loan forgiveness,
- reductions to loan forgiveness amounts, and
- the loan forgiveness process for lenders.
Please note that SBA has still not released the guidance on how lenders submit the required forgiveness documentation.
Guidance on Refinance of EIDL Loans with PPP Loan Proceeds
An EIDL Loan May Not Be Refinanced with a PPP Loan When:
- The PPP Borrower received the EIDL loan before January 31, 2020 or after April 3, 2020.
An EIDL Loan is Not Required to Be Refinanced with a PPP Loan When:
- The PPP Borrower received funds from an EIDL loan from January 31, 2020 through April 3, 2020; and
- The PPP Borrower used the EIDL loan for purposes other than payroll costs.
A PPP Loan Must Be Used to Refinance the Full Amount of EIDL Loan When:
- The PPP Borrower received funds from the EIDL loan from January 31, 2020 through April 3, 2020; and
- The PPP Borrower used the EIDL loan funds to pay payroll costs.
FDIC offsets PPP impact on deposit insurance assessments
The FDIC approved a
final rule
to ensure banks will not be subject to significantly higher deposit insurance assessments for participating in the Paycheck Protection Program, PPP Liquidity Facility, and Money Market Mutual Fund Liquidity Facility.
The final rule generally removes PPP loans from the assessment rate and provides an offset for increases in the assessment base attributable to participation in these programs. The final rule will take effect immediately with an application date of April 1, 2020, and changes will apply to assessments starting in the second quarter of 2020.
Smaller lenders continue to lead on PPP
Lenders under $10 billion in assets have made some 2.35 million Paycheck Protection Program loans worth more than $226 billion through both rounds of funding, the SBA
reported
. Approximately $128 billion is still available.
According to an SBA summary of loan approvals through June 20, lenders from $10 billion to $50 billion in assets made more than 720,000 loans worth more than $100 billion. Combined, the two asset classes account for nearly 66 percent of approved loans and more than 63 percent of the approved dollar amount.
As of June 20, in Iowa 56,603 loans have been made, totaling just over $5.04 billion.
