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Paycheck Protection Program (PPP) Interim Final Rule Released

The new release of the interim final rules for the Paycheck Protection Program (PPP) confirms its immediate implementation. Unlike other federal regulations that take effect 30 to 60 days after posting to the Federal Register, these rules are effective immediately upon post to provide the quickest support to small businesses. Specifically, these interim final rules provide the implementation of only sections 1102 and 1104 of the CARES Act, i.e., the Paycheck Protection Program (PPP).


President Trump’s March 13, 2020, COVID-19 emergency declaration is the catalyst for the introduction and implementation of many temporary new Federal and State programs that bring assistance to individuals and businesses. The Coronavirus Aid, Relief, and Economic Stability (CARES) Act, passed on March 27, 2020, is the funding and vehicle providing many of these new programs. The PPP is a temporary new loan program providing forgiveness up to the full principal amount of qualifying loans.

The PPP, administered by the Small Business Association (SBA), provides 100% guaranteed covered loans available to businesses and self-employed individuals through the banks, credit unions, and other lenders during the period of February 15, 2020, through June 30, 2020. These loans are available to small businesses and sole proprietors on Friday, April 3, and to independent contractors and self-employed individuals on Friday, April 10. Additional details about this loan and the CARES Act can be found here.

Details of the Interim Final Rule:

The interim rules apply to PPP applications submitted through June 30, 2020, or until loan funds run out. The Department sets aside the next 30 days for comments and, as such, will review and respond following that 30 day period.

The interim final rule provides some clarity, i.e., answers to the questions posed by small businesses as they work to apply for these loans. Here is the FAQ from the interim final rule that provides additional guidance to borrowers.

Additional Guidance Pending

Here is a list of items the interim final rule does not address:

  • applicability of business affiliation rules i.e., rules governing when related businesses need to be aggregated or combined;
  • which group health costs and premiums can be included in both the loan and forgiveness amounts;
  • overall guidance on loan forgiveness;
  • the definition of “full-time equivalent employee” under the loan forgiveness provisions;

Click here to download a full Q&A on the Paycheck Protection Program – Interim Final Rule

For additional insights on the Paycheck Protection Program or the CARES Act, visit OneDigital’s Stimulus Guidance for Employers Page, or reach out to your local OneDigital advisory team.

The Paycheck Protection Program does not apply to all businesses. Based on past SBA practice, our expectation is that Venture Capital or Private Equity-backed companies will be excluded from the SBA’s Paycheck Protection Program. We will be monitoring these developments closely, but please also consult with your investor(s) for guidance.