Table of contents. 636(a)(36)(O)) requires that PPP loans be risk-weighted at 0% under risk-based capital requirements. Section 1102(a)(2)(G), the section outlining the PPP loans, explains the borrower requirements. The Section 1102 “paycheck protection program” statute sets forth a number of borrower requirements. For example, you needed to be “in business” on February 15, 2020. Short title This Act may be cited as the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. 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”. 1. Thank you, Dan. Q… 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. 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. The PPP was created under section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (P.L. Summary. You are not required to apply with any specific lender. The Paycheck Protection Program would: • Support $349 billion in 100 percent guaranteed, low interest, no fee loans of up to $10 Although permissible PPP expenses under Section 1102 of the CARES Act, “interest on any other debt obligations that were incurred before the covered period” are not included as nonpayroll costs in the forgiveness section of the CARES Act nor in the Interim Final Rule. In a May 28 notational vote, the FCA board adopted the 0% risk weight for PPP loans using its authority under 12 CFR § 628.1(d)(3). The PPP is designed to assist small businesses with 500 or fewer employees maintain payroll and pay for qualified expenses during the coronavirus quarantine period. The Paycheck Protection Program (PPP) – the program created under Section 1102 of the CARES Act to offer small businesses forgivable loans – has made headlines since its creation. • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. References. On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation Section 1102 and 1106 of the CARES Act, established the PPP as a new loan program administered by the U.S. Small Business Administration (SBA) as part of its section 7(a) Loan Program (15 U.S.C. Section 1102 of the Act temporarily adds a new product, titled the “Paycheck Protection Program,” to the U.S. Small Business Administration's (SBA's) 7(a) Loan Program. Section 1102 of the CARES Act provided that PPP borrowers who had received an EIDL loan between January 31, 2020 and April 3, 2020, could (and in some circumstances had to) increase their PPP … endobj <> The receipt of the loan funds, including PPP funds, are not subject to income tax. Checklist for Applying for a PPP Loan Checklist for Applying […] [��_fӋ�j4J��M��_�ʳ�5�'yR�_��d5{��N��_}y��� K��2����+�� K$�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 CARES ACT – SEC. 636(a)) that was designed to assist small businesses nationwide adversely impacted by the COVID–19 emergency to pay payroll 1 0 obj endobj � ���Y��4�`4�/�"k��y�O1i�R�ID��U/��X���8���Ȉ��w����x�f!�"�/�E. <> 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. This pr ogram is administered by the . The Coronavirus Aid, Relief and Economic Security Act (CARES) is an extensive stimulus package. @�� ��]�d)�KYW"�BIs�K@ 9�q�zT��4�S4 ��~NXU������B�� � 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 … PAYCHECK PROTECTION PROGRAM . For-profit businesses That is because Section 1102, by itself, only allows the SBA to issue the PPP loans. Section 1102 of the CARES Act contained many rules that prevented many people from obtaining a PPP loan. Hospital participation Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. (a) IN GENERAL.—Section 7(a) of the Small Business Act (15 U.S.C. stream On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). jklcpa. The receipt of the loan funds, including PPP funds, are not subject to income tax. 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. There is one main requirement, governed under section 1102 of the CARES Act that brought the PPP into effect. 3 0 obj Many of the people and companies that received a PPP loan already know and navigated these rules. endobj 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. 4 0 obj Section 1106 of the Act provides for forgiveness of up 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 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. 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. 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. 4 0 obj 2. 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. Short title. Loan forgiveness section 1106 page 19 EDIL section 1110 page 26. Sec. CARES ACT Section 1102 Paycheck Protection Program. <>/Metadata 211 0 R/ViewerPreferences 212 0 R>> An additional $310 billion was allocated under the Enhancement Act. stream x��=ko�H���?���B\D��f��@���Y��d�I���� ۊ-D�=��ć��WU�$ْl�5� ��棪��]����j=�:=_'?��v�^Oϯfɯo���������ۏ���r���,�~�? 2 0 obj Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). �5>ǁ������vrC�8��\$g�$$U�IUrJ�L���z�����l����[Qy����f���7���W�V�0�����N>]��?���|i.t��� 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 … The self-certification requirement—or more accurately, the fluid nature of the self-certification requirement. 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. 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). endobj No collateral for first $25,000. ^�T��{h\ܨ4v�����ϯ��0�$j�U�_�R����s������H�vͺA�i�+Q\xi��*}. However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … 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 The Paycheck Protection Program was established by section 1102 of the CARES Act. 1. 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. 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. 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. Unfortunately, one of the other murkier requirements has suddenly become terribly problematic. 116-136) and generally allows businesses with fewer than 500 employees to borrow up to $10 million. Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … Section 1106 of the CARES Act provides for the forgiveness of these PPP Loans in certain circumstances by converting the PPP Loans into grants. !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. <>/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 … 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. %���� <> Sec. Most of the requirements work simply. 1102. Protection Program” in Section 1102, with additional modificatons made by the . %���� %PDF-1.7 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. Section 5 provides a limited Safe Harbor with respect to certification concerning the need for a PPP loan. 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. 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 … Hospital participation in Small Business Administration (SBA) programs is typically limited by revenue. 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 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. However, following those rules does not mean the Government will discharge your PPP loan. 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 … <> 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. 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). • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 … 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. Loans made under the PPP can be used to cover costs incurred during the period from February 15, 2020 to June 30, 2020. 2 Quote; Link to post Share on other sites. The loan is available for employers and 501(c)(3) organizations under endobj The goal of this program is to enable employers to carry their payroll and other operating costs through this crisis. I have some anxious clients to talk to next week, this has given me a better understanding to help them. Lender agreement to make SBA-guaranteed financing available as part of the CARES Act. Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . Apr 4. <>/Metadata 92 0 R/ViewerPreferences 93 0 R>> 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. Written By Betsy Souer. 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. endobj 3 0 obj 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. That requirement? 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”). 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. contractors, and self-employed 500 or fewer employees Apply by June 30, 2020. PPP is covered in section 1102 page 6. 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. a. 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. Section 1102 of the Act establishes the PPP as a temporary addition to the SBA’s 7(a) loan program. (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. ���/�z. Section 1102, created the PPP under section 7(a) of the Small Business Act. 2. 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. CARES ACT – SEC. 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. Small Business Administration (SBA), with the support of the Department of Treasury. 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. Paycheck Protection Program Flexibility Act of 2020. 2 0 obj 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). Table of contents The table of contents for this Act is as follows: Sec. 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. 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. Can be combined with PPP loan and PPP loan forgiveness, but this debt relief does not apply to a PPP 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. 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. 3. 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. 1 0 obj Posted April 4. jklcpa. %PDF-1.7 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. <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Regarding forgiveness of the PPP loans, Section 1106(i) of the CARES Act deems forgiven PPP debt, that would otherwise be 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 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. 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