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Focus Area: Coronavirus/COVID-19

Updated Treasury Department FAQs

The Treasury Department has updated its FAQs on the SBA PPP loan program. The FAQs can be found here. It answers some but not all of the lenders’ questions. In particular, the FAQs provide that:

  1. Lenders are not required to make an independent determination on the affiliation rules – it’s the borrower’s responsibility to comply with the affiliation rules; (Answer #4)
  2. The $100,000 limitation for payroll purposes is for the cash compensation part of an employee’s income, not the non-cash component. So, all non-cash compensation can be counted as part of the payroll costs; (Answer #7)
  3. Lenders may rely on the signature of one authorized representative provided that representative is authorized to make all the certifications relating to each 20% owner and to the business itself; (Answer #11)
  4. Answers regarding when the time period should be for calculating payroll costs can e found in Answer 14;
  5. On federal taxes, federal taxes paid by an employee are counted towards payroll costs BUT federal taxes paid by an employer are not (Answer #16);
  6. If a PPP loan has already been processed based on the guidance previously provided, lenders don’t have to change the terms of the loan based on this guidance but if it hasn’t been processed yet, the application can be revised (Answer #17).

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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