WASHINGTON—NAFCU is urging the Small Business Administration (SBA) to release updated guidance to help Paycheck Protection Program (PPP) lenders and borrowers implement changes enacted by the Paycheck Protection Program Flexibility Act – H.R. 7010.
As CUToday.info reported, President Donald Trump last week signed into law legislation to add flexibility to how PPP funds are used, including extending deadlines for using the loans and rehiring workers.
NAFCU said the newly updated version of its PPP FAQs notes these changes
In the letter to SBA Administrator Jovita Carranza, NAFCU President and CEO Dan Berger specifically asked the SBA for clarification on whether the lowered requirement of loan proceeds to be used for payroll costs applies to all loans whose forgiveness applications have not yet been approved.
Berger also said guidance should cover whether borrowers who have already applied for forgiveness may reapply to "alleviate any disparity among borrowers."
‘Critical Clarification’
"This clarification is critical for those borrowers who obtained a PPP loan on April 3, 2020 when the program began and have already applied for loan forgiveness upon the expiration of the previous 8-week covered period," wrote Berger. "H.R. 7010’s change to the required payroll costs may affect the amount of forgiveness and provide these borrowers with the ability to forgive a greater amount of non-payroll costs."
Additionally, Berger said there is a need for instructions outlining required borrow documentation for the new forgiveness reduction exemptions.
"To assist both borrowers and lenders, the SBA must provide guidance regarding the required documentation an employer must provide to utilize one of the exemptions and explicitly provide that lenders may rely on the documentation for a forgiveness determination," added Berger.