Rules and Regulations — Paycheck Protection Program (Federal Register, Vol. 86, No. 43, March 8, 2021)

Summary

A page of the Federal Register, Vol. 86, No. 43, Monday, March 8, 2021, p. 13149, carrying a Small Business Administration interim final rule on changes related to loans made under the Paycheck Protection Program. It states that the rule implements Economic Aid Act changes, including a new temporary section 7(a)(37) of the Small Business Act authorizing SBA to guarantee additional PPP loans, called Second Draw PPP Loans, to eligible borrowers. It states that comments must be received on or before April 7, 2021.

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This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations Federal Register
13149
Vol. 86, No. 43
Monday, March 8, 2021
1 86 FR 3692 (Jan. 14, 2021) (which we refer to
as the ‘‘consolidated interim final rule
implementing updates to the PPP’’); 86 FR 3712
(Jan. 14, 2021) (which we refer to as the ‘‘interim
final rule on second draw PPP loans’’).
2 86 FR 8283 (Feb. 5, 2021) (which we refer to as
the ‘‘consolidated interim final rule on loan
forgiveness requirements and loan review
procedures’’).
SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
[Docket Number SBA–2021–0010]
RIN 3245–AH67
Business Loan Program Temporary
Changes; Paycheck Protection
Program—Revisions to Loan Amount
Calculation and Eligibility
AGENCY: U.S. Small Business
Administration.
ACTION: Interim final rule.
SUMMARY: This interim final rule
implements changes related to loans
made under the Paycheck Protection
Program (PPP), which was originally
established under the Coronavirus Aid,
Relief, and Economic Security Act
(CARES Act) to provide economic relief
to small businesses nationwide
adversely impacted by the Coronavirus
Disease 2019 (COVID–19). On December
27, 2020, the Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and
Venues Act (Economic Aid Act) was
enacted, extending the authority to
make PPP loans through March 31,
2021, revising certain PPP requirements,
and permitting second draw PPP loans.
This interim final rule allows
individuals who file an IRS Form 1040,
Schedule C to calculate their maximum
loan amount using gross income,
removes the eligibility restriction that
prevents businesses with owners who
have non-financial fraud felony
convictions in the last year from
obtaining PPP loans, and removes the
eligibility restriction that prevents
businesses with owners who are
delinquent or in default on their Federal
student loans from obtaining PPP loans.
DATES:
Effective date: Unless otherwise
specified in this interim final rule, the
provisions of this interim final rule are
effective March 4, 2021.
Applicability date: Unless otherwise
specified, this interim final rule applies
to Paycheck Protection Programs loans
approved after the effective date of this
rule.
Comment date: Comments must be
received on or before April 7, 2021.
ADDRESSES: You may submit comments,
identified by number SBA–2021–0010
through the Federal eRulemaking Portal:
http://www.regulations.gov. Follow the
instructions for submitting comments.
SBA will post all comments on
www.regulations.gov. If you wish to
submit confidential business
information (CBI) as defined in the User
Notice at www.regulations.gov, please
send an email to ppp-ifr@sba.gov. All
other comments must be submitted
through the Federal eRulemaking Portal
described above. Highlight the
information that you consider to be CBI
and explain why you believe SBA
should hold this information as
confidential. SBA will review the
information and make the final
determination whether it will publish
the information.
FOR FURTHER INFORMATION CONTACT: A
Call Center Representative at 833–572–
0502, or the local SBA Field Office; the
list of offices can be found at https://
www.sba.gov/tools/local-assistance/
districtoffices.
SUPPLEMENTARY INFORMATION:
I. Background Information
On March 27, 2020, the Coronavirus
Aid, Relief, and Economic Security Act
(the CARES Act) (Pub. L. 116–136) was
enacted to provide emergency assistance
and health care response for
individuals, families, and businesses
affected by the coronavirus disease 2019
(COVID–19) pandemic. Section 1102 of
the CARES Act temporarily permitted
the Small Business Administration
(SBA) to guarantee 100 percent of 7(a)
loans under a new program titled the
‘‘Paycheck Protection Program,’’
pursuant to section 7(a)(36) of the Small
Business Act (15 U.S.C. 636(a)(36))
(First Draw PPP Loans). Section 1106 of
the CARES Act provided for forgiveness
of up to the full principal amount of
qualifying loans guaranteed under the
Paycheck Protection Program (PPP).
On December 27, 2020, the Economic
Aid to Hard-Hit Small Businesses,
Nonprofits and Venues Act (Economic
Aid Act) (Pub. L. 116–260) was enacted.
The Economic Aid Act reauthorized
lending under the PPP through March
31, 2021. The Economic Aid Act added
a new temporary section 7(a)(37) to the
Small Business Act, which authorizes
SBA to guarantee additional PPP loans
(Second Draw PPP Loans) to eligible
borrowers under generally the same
terms and conditions available under
section 7(a)(36) of the Small Business
Act through March 31, 2021. The
Economic Aid Act also redesignated
section 1106 of the CARES Act as
section 7A of the Small Business Act, to
appear after section 7 of the Small
Business Act.
SBA, in consultation with the
Department of the Treasury (Treasury),
initially published an interim final rule
implementing the PPP on April 15, 2020
and subsequently issued additional
interim final rules. On January 14, 2021,
SBA published interim final rules
implementing the Economic Aid Act
amendments to the PPP.1 On February
5, 2021, SBA published an additional
interim final rule implementing
Economic Aid Act changes related to
the forgiveness and review of PPP
loans.2 As described below, this interim
final rule revises the consolidated
interim final rule implementing updates
to the PPP, the interim final rule on
second draw PPP loans, and the
consolidated interim final rule on loan
forgiveness requirements and loan
review procedures, to allow individuals
who file an IRS Form 1040, Schedule C
to calculate their maximum loan
amount using gross income. This
interim final rule also revises the
consolidated interim final rule
implementing updates to the PPP to
remove the eligibility restriction that
prevents businesses with owners who
have non-financial fraud felony
convictions in the last year from
obtaining PPP loans and remove the
eligibility restriction that prevents
businesses with owners who are
delinquent or in default on their Federal
student loans from obtaining PPP loans.
The changes apply to both First Draw
PPP Loans and Second Draw PPP Loans.
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3 15 U.S.C. 636(a)(36)(A)(viii)(I)(bb).
4 See A Look at Nonemployer Businesses, SBA
Office of Advocacy, August, 2018, A Look at
Nonemployer Businesses (sba.gov).
5 See 15 U.S.C. 636(a)(36)(P)(iv).
6 For a Schedule C filer without employees,
owner compensation is the only component of the
borrower’s payroll costs. For a Schedule C filer with
employees, owner compensation is added to
employee payroll costs to determine the borrower’s
total payroll costs.
7 This is consistent with the approach for
calculating payroll costs for farmers and ranchers in
subsection B.4.d. of the consolidated interim final
rule implementing updates to the PPP.
II. Comments and Immediate Effective
Date
This interim final rule is being issued
without advance notice and public
comment because section 1114 of the
CARES Act and section 303 of the
Economic Aid Act authorize SBA to
issue regulations to implement the
Paycheck Protection Program without
regard to notice requirements. In
addition, this rule is being issued to
allow for immediate implementation of
these changes. The intent of both the
CARES Act and the Economic Aid Act
is that SBA provide relief to America’s
small businesses expeditiously. Given
the urgent need to provide borrowers
with timely relief and the short period
of time before the program ends on
March 31, 2021, SBA in consultation
with Treasury has determined that it is
impractical and not in the public
interest to provide a 30-day delayed
effective date. An immediate effective
date will allow SBA to give small
businesses affected by this interim final
rule the maximum amount of time to
apply for loans and lenders the
maximum amount of time to process
applications before the program ends.
This good cause justification also
supports waiver of the 60-day delayed
effective date for major rules under the
Congressional Review Act at 5 U.S.C.
808(2). Although this interim final rule
is effective immediately, comments are
solicited from interested members of the
public on all aspects of the interim final
rule.
These comments must be submitted
on or before April 7, 2021. SBA will
consider these comments and the need
for making any revisions as a result of
these comments.
III. Paycheck Protection Program—
Revisions to Rules Implementing the
Economic Aid Act
1. Gross Income
The statutory definition of ‘‘payroll
costs’’ applicable to sole proprietors and
independent contractors refers to ‘‘a
wage, commission, income, net earnings
from self-employment, or similar
compensation and that is in an amount
that is not more than $100,000 on an
annualized basis, as prorated for the
period during which the payments are
made or the obligation to make the
payments is incurred.’’3 Previously,
PPP rules defined payroll costs for
individuals who file an IRS Form 1040,
Schedule C as payroll costs (if
employees exist) plus net profits, which
is net earnings from self-employment.
SBA is aware of significant concerns
with this definition, because it does not
take into account fixed and other
business expenses that a small business
must cover to stay in operation and
therefore keep the owner employed.
Thus, the support for employment for
sole proprietors includes covering
business expenses as well as net profits.
This change would affect many sole
proprietors who have been effectively
excluded from the PPP, especially those
with very little or negative net profit,
many of which are located in
underserved communities. Businesses
that file Schedule C have higher
concentrations of ownership by
members of underserved groups. An
analysis by the SBA Office of Advocacy
of Census data found that firms with no
employees are 70 percent owned by
women and minorities, compared to 40
percent for businesses with employees.4
SBA has determined that changing the
calculation for sole proprietors,
independent contractors, and self-
employed individuals will reduce
barriers to accessing the PPP and
expand funding among the smallest
businesses.
Based on the statutory language of the
CARES Act, SBA, in consultation with
Treasury, has determined that SBA has
discretion to establish an alternative
calculation methodology for payroll
costs for sole proprietors and
independent contractors. For these
borrowers, the statutory definition of
‘‘payroll costs’’ includes both ‘‘income’’
as well as ‘‘net earnings from self-
employment.’’ The inclusion of both
these terms in the statutory language
indicates that they may have different
meanings. Therefore, the term ‘‘income’’
as used in the definition of payroll costs
for sole proprietors and independent
contractors may be construed broadly to
encompass a borrower’s net income and
a borrower’s gross income.
Defining ‘‘income’’ to include gross
income is consistent with Congress’s
intent that the PPP provide broad relief
to small businesses and keep
individuals employed, and that the PPP
prioritize loans to, among others, small
business concerns and entities in
underserved markets, and small
business concerns owned and
controlled by socially and economically
disadvantaged individuals and women.5
As described above, under the prior
rules, many of these borrowers may not
have received meaningful amounts from
the PPP to support their own
employment due to having small net
profits. Allowing a borrower to receive
a loan amount based on their gross
business income will provide the
borrower a loan amount that is
sufficient to meet the borrower’s fixed
expenses that are necessary to stay in
business and keep the owner employed.
SBA is implementing this change with
respect to PPP loans that are approved
after the effective date of this rule. A
borrower whose PPP loan has already
been approved as of the effective date of
this rule cannot increase its PPP loan
amount based on the new calculation
methodology.
Therefore, SBA, in consultation with
Treasury, has determined that a
Schedule C filer may elect to calculate
the owner compensation share of its
payroll costs—that is, the share of its
payroll costs that represents
compensation of the owner—based on
either (i) net profit or (ii) gross income,
as calculated under the rule below.6
Gross income is the amount the
borrower reports on line 7 of Schedule
C. If a Schedule C filer has no
employees, the borrower may elect
simply to calculate its loan amount
based on either net profit or gross
income. If a Schedule C filer has
employees, the borrower may elect to
calculate the owner compensation share
of its payroll costs based on either (i) net
profit or (ii) gross income minus
expenses reported on lines 14
(employee benefit programs), 19
(pension and profit-sharing plans), and
26 (wages (less employment credits)) of
IRS Form 1040, Schedule C. Expenses
reported on lines 14, 19, and 26 of the
IRS Form 1040, Schedule C represent
employee payroll costs and are
subtracted from the owner
compensation share of payroll costs if
the owner uses gross income to
calculate its loan amount in order to
avoid double-counting these costs.7 In
the context of determining a borrower’s
eligible expenses and forgiveness
amount, this interim final rule refers to
the owner compensation share of a
Schedule C filer’s loan amount as
‘‘proprietor expenses.’’ Proprietor
expenses encompass an owner’s
business expenses and own
compensation but do not include
employee payroll costs. This proprietor
expenses calculation limits a Schedule
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8 SBA is not applying this safe harbor exclusion
to Second Draw PPP Loans, because those
applicants are required to certify that they have
realized a reduction in gross receipts in excess of
25% relative to the relevant comparison time
period.
9 SBA has developed a new borrower application
form, SBA Form 2483–C, for First Draw PPP Loan
borrowers that elect to use the new gross income
calculation. Borrowers will be required to disclose
their total amount of gross income on the form.
10 See part V. of the consolidated interim final
rule on loan forgiveness requirements and loan
review procedures.
53 This subsection was originally published at 85
FR 21747, subsection III.1.b. (April 20, 2020) and
has been modified to conform to additional rules or
guidance and the Economic Aid Act.
C filer that included employee payroll
costs in determining the PPP loan
amount from taking the full loan
amount as owner compensation. This
promotes Congress’s goal of keeping
workers paid and employed. However,
the use of gross income by Schedule C
filers may, in some cases, increase the
risk of waste, fraud, or abuse, because it
will substantially increase the
maximum loan amount for relevant
applicants, and in some cases an
applicant’s gross income may not
accurately reflect the extent to which a
PPP loan is necessary to support the
ongoing operations of the applicant’s
business. To mitigate this risk, if a
Schedule C filer elects to use gross
income to calculate its loan amount on
a First Draw PPP Loan and the borrower
reported more than $150,000 in gross
income on the Schedule C that was used
to calculate the borrower’s loan amount,
the borrower will not automatically be
deemed to have made the statutorily
required certification concerning the
necessity of the loan request in good
faith, and the borrower may be subject
to a review by SBA of its certification.8
The safe harbor that SBA previously
provided for borrowers that, together
with their affiliates, receive PPP Loans
with an original principal amount of
less than $2 million, will not apply to
Schedule C filers that elect to use gross
income to calculate their loan amount
on a First Draw PPP Loan if they report
more than $150,000 in gross income on
the Schedule C that was used to
calculate the borrower’s loan amount.
SBA is eliminating the loan necessity
safe harbor for these borrowers as they
may be more likely to have other
available sources of liquidity to support
their business’s operations than
Schedule C filers with lower levels of
gross income. SBA will review a sample
of the population of First Draw PPP
Loans made to Schedule C filers using
the gross income calculation if the gross
income on the Schedule C used to
calculated the borrower’s loan amount
exceeds the threshold of $150,000.9 If
the borrower exceeds this threshold,
then SBA will, for the sample drawn,
assess whether these borrowers
complied with the PPP eligibility
criteria, including the good faith loan
necessity certification. This will serve as
an additional deterrent to fraud, waste,
and abuse because higher income
borrowers that elect to use gross income
rather than net profit to calculate their
loan amount will face the prospect of a
heightened review, which would
include a review of their good faith loan
necessity certification. The $150,000
gross income threshold is necessary in
light of the potentially large volume of
applications SBA will receive from First
Draw PPP Loan applicants that are
eligible to use the gross income
calculation. Maintaining the safe harbor
for borrowers under this threshold is
also necessary in light of the deterrent
effect of auditing risk for many
underresourced borrowers whose fixed
cost of bookkeeping is higher in
proportion to their income. This
approach will enable SBA to conserve
its finite audit resources and focus its
reviews of First Draw PPP Loans using
the new calculation on larger loans,
where the compliance effort may yield
higher returns. The reviews of loans to
Schedule C filers that used the gross
income calculation will follow the same
processes that apply to PPP loans
generally, except as specified above.10
Therefore, the following changes are
made to PPP rules:
a. Subsection B.4.b of the
consolidated interim final rule
implementing updates to the PPP (86 FR
3692, 3700) is revised to read as follows:
b. I have income from self-
employment and file an IRS Form 1040,
Schedule C. How do I calculate the
maximum amount I can borrow, and
what documentation is required?53
How you calculate your maximum
loan amount depends upon whether you
employ other individuals. If you have
no employees, use the following
methodology to calculate your
maximum loan amount:
i. Step 1: From your 2019 or 2020 IRS
Form 1040, Schedule C, you may elect
to use either your line 31 net profit
amount or your line 7 gross income
amount. (If you are using 2020 to
calculate payroll costs and have not yet
filed a 2020 return, fill it out and
compute the value.) If this amount is
over $100,000, reduce it to $100,000. If
both your net profit and gross income
are zero or less, you are not eligible for
a PPP loan.
ii. Step 2: Calculate the average
monthly net profit or gross income
amount (divide the amount from Step 1
by 12).
iii. Step 3: Multiply the average
monthly net profit or gross income
amount from Step 2 by 2.5. This amount
cannot exceed $20,833.
iv. Step 4: Add the outstanding
amount of any Economic Injury Disaster
Loan (EIDL) made between January 31,
2020 and April 3, 2020 that you seek to
refinance. Do not include the amount of
any advance under an EIDL COVID–19
loan (because it does not have to be
repaid).
You must provide the 2019 or 2020
(whichever you used to calculate your
loan amount) IRS Form 1040, Schedule
C with your PPP loan application to
substantiate the applied-for PPP loan
amount and a 2019 or 2020 (whichever
you used to calculate your loan amount)
IRS Form 1099–MISC detailing
nonemployee compensation received
(box 7), invoice, bank statement, or book
of record that establishes you are self-
employed. If using 2020 to calculate
your loan amount, this is required
regardless of whether you have filed a
2020 tax return with the IRS. You must
provide a 2020 invoice, bank statement,
or book of record to establish you were
in operation on or around February 15,
2020.
If you have employees, use the
following methodology to calculate your
maximum loan amount:
i. Step 1: Compute 2019 or 2020
payroll (using the same year for all
items) by adding the following:
a. At your election, either (1) the net
profit amount from line 31 of your 2019
or 2020 IRS Form 1040, Schedule C, or
(2) your 2019 or 2020 gross income
minus employee payroll costs,
calculated as your gross income
reported on IRS Form 1040, Schedule C,
line 7, minus your employee payroll
costs reported on lines 14, 19, and 26 of
IRS Form 1040, Schedule C (for either
option, if you are using 2020 amounts
and have not yet filed a 2020 return, fill
it out and compute the value), up to
$100,000 on an annualized basis, as
prorated for the period during which the
payments are made or the obligation to
make the payments is incurred (if this
amount is over $100,000, reduce it to
$100,000, or if this amount is less than
zero, set this amount at zero);
b. 2019 or 2020 gross wages and tips
paid to your employees whose principal
place of residence is in the United
States, computed using 2019 or 2020
IRS Form 941 Taxable Medicare wages
& tips (line 5c, Column 1) from each
quarter plus any pre-tax employee
contributions for health insurance or
other fringe benefits excluded from
Taxable Medicare wages & tips; subtract
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80 This subsection was originally published at 85
FR 21747, subsection III.1.d. (April 20, 2020) and
has been modified to conform to the Economic Aid
Act.
81 Under section 7(a)(36)(Q) of the Small Business
Act, as amended by section 341 of the Economic
Aid Act, an EIDL loan used for purposes other than
paying payroll costs and other eligible PPP
expenditures is not considered a duplication of the
assistance available under the PPP.
82 Items vi. through ix. were added to conform to
section 304 of the Economic Aid Act. These
provisions are effective as if included in the CARES
Act and apply to any loan made before, on, or after
December 27, 2020, including forgiveness of such
loan, unless SBA has remitted a loan forgiveness
payment to the lender on the PPP loan.
87 This subsection has been added to codify the
safe harbor contained in FAQ 46 (posted May 13,
2020).
any amounts paid to any individual
employee in excess of $100,000 on an
annualized basis, as prorated for the
period during which the payments are
made or the obligation to make the
payments is incurred, and any amounts
paid to any employee whose principal
place of residence is outside the United
States; and
c. 2019 or 2020 employer
contributions to employee group health,
life, disability, vision and dental
insurance (portion of IRS Form 1040,
Schedule C line 14 attributable to those
contributions); retirement contributions
(IRS Form 1040, Schedule C, line 19);
and state and local taxes assessed on
employee compensation (primarily
under state laws commonly referred to
as the State Unemployment Tax Act or
SUTA from state quarterly wage
reporting forms).
ii. Step 2: Calculate the average
monthly amount (divide the amount
from Step 1 by 12).
iii. Step 3: Multiply the average
monthly amount from Step 2 by 2.5.
iv. Step 4: Add the outstanding
amount of any EIDL made between
January 31, 2020 and April 3, 2020 that
you seek to refinance. Do not include
the amount of any advance under an
EIDL COVID–19 loan (because it does
not have to be repaid).
You must supply your 2019 or 2020
(whichever you used to calculate your
loan amount) IRS Form 1040, Schedule
C; Form 941 (or other tax forms or
equivalent payroll processor records
containing similar information); and
state quarterly wage unemployment
insurance tax reporting forms from each
quarter in 2019 or 2020 (whichever you
used to calculate your loan amount) or
equivalent payroll processor records,
along with evidence of any retirement
and health insurance contributions, if
applicable. A payroll statement or
similar documentation from the pay
period that covered February 15, 2020
must be provided to establish you were
in operation on February 15, 2020.
b. Subsection B.11.b of the
consolidated interim final rule
implementing updates to the PPP (86 FR
3692, 3704) is revised to read as follows
(footnotes are not restated):
b. How can PPP loans be used by
individuals with income from self-
employment who file an IRS Form 1040,
Schedule C?80
The proceeds of a PPP loan are to be
used for the following:
i. For borrowers that use net profit to
calculate loan amount, owner
compensation replacement, calculated
based on 2019 or 2020 (using the same
year that was used to calculate the loan
amount) net profit as described in
subsection B.4.b. For borrowers that use
gross income to calculate loan amount,
proprietor expenses (business expenses
plus owner compensation), calculated
based on 2019 or 2020 (using the same
year that was used to calculate the loan
amount) gross income as described in
subsection B.4.b (this amount cannot
exceed $20,833). For borrowers who
used gross income to calculate the loan
amount and have no employees,
proprietor expenses equal gross income.
For borrowers who used gross income to
calculate the loan amount and have
employees, proprietor expenses equal
the difference between gross income
and employee payroll costs.
ii. Employee payroll costs (as defined
in subsection B.4.g. of the consolidated
interim final rule implementing updates
to the PPP) for employees whose
principal place of residence is in the
United States, if you have employees.
iii. Mortgage interest payments (but
not mortgage prepayments or principal
payments) on any business mortgage
obligation on real or personal property
(e.g., the interest on your mortgage for
the warehouse you purchased to store
business equipment or the interest on an
auto loan for a vehicle you use to
perform your business), business rent
payments (e.g., the warehouse where
you store business equipment or the
vehicle you use to perform your
business), and business utility payments
(e.g., the cost of electricity in the
warehouse you rent or gas you use
driving your business vehicle). You
must have claimed or be entitled to
claim a deduction for such expenses on
your 2019 or 2020 (whichever you used
to calculate loan amount) IRS Form
1040, Schedule C for them to be a
permissible use. For example, if you did
not claim or are not entitled to claim
utilities expenses on your 2019 or 2020
IRS Form 1040, Schedule C, you cannot
use the proceeds for utilities.
iv. Interest payments on any other
debt obligations that were incurred
before February 15, 2020 (such amounts
are not eligible for PPP loan
forgiveness).
v. Refinancing an SBA EIDL loan
made between January 31, 2020 and
April 3, 2020 (maturity will be reset to
PPP’s maturity of two years for PPP
loans made before June 5, 2020 unless
the borrower and lender mutually agree
to extend the maturity of such loans to
five years, or PPP’s maturity of five
years for PPP loans made on or after
June 5).81
vi. Covered operations expenditures,
as defined in section 7A(a) of the Small
Business Act, to the extent they are
deductible on IRS Form 1040, Schedule
C.
vii. Covered property damage costs, as
defined in section 7A(a) of the Small
Business Act, to the extent they are
deductible on IRS Form 1040, Schedule
C.
viii. Covered supplier costs, as
defined in section 7A(a) of the Small
Business Act, to the extent they are
deductible on IRS Form 1040, Schedule
C.
ix. Covered worker protection
expenditures, as defined in section
7A(a) of the Small Business Act, to the
extent they are deductible on Form IRS
1040, Schedule C.82
c. Subsection B.13 of the consolidated
interim final rule implementing updates
to the PPP (86 FR 3692, 3706) is revised
to read as follows:
13. Limited safe harbor with respect to
certification concerning need for PPP
loan request.87
The CARES Act requires each
applicant applying for a PPP loan to
certify in good faith ‘‘that the
uncertainty of current economic
conditions makes necessary the loan
request to support the ongoing
obligations’’ of the applicant. SBA, in
consultation with Treasury, issued
additional guidance concerning how
SBA will review the required good-faith
certification. See FAQ 46 (as originally
posted May 13, 2020). This guidance
included a safe harbor providing that
any PPP borrower, together with its
affiliates, that received PPP loans with
an original principal amount of less
than $2 million will be deemed to have
made the required certification
concerning the necessity of the loan
request in good faith. In light of the
additional flexibility being provided to
certain borrowers to use their gross
income amount, as reported on line 7 of
IRS Form 1040, Schedule C, borrowers
that elect to use gross income to
calculate their maximum loan amount
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19 For First Draw PPP loans made in 2020,
borrowers use 2019. For First Draw PPP loans made
in 2021 and Second Draw PPP Loans, borrowers use
the year (2019 or 2020) that was used to calculate
the borrower’s loan amount.
20 For self-employed borrowers with no
employees that file IRS Form 1040, Schedule C,
who used gross income to calculate the loan
amount, proprietor expenses equal gross income.
For self-employed borrowers with employees that
file IRS Form 1040, Schedule C, who used gross
income to calculate the loan amount, proprietor
expenses equal the difference between gross income
and employee payroll costs. See subsections B.4.b
and B.11.b of the consolidated interim final rule
implementing updates to the PPP as amended by
this interim final rule. For self-employed borrowers
that file IRS Form 1040, Schedule F and have no
employees, gross income may be used instead of net
profit throughout this calculation. For self-
employed borrowers that file IRS Form 1040,
Schedule F and have employees, the difference
between gross income and employee payroll costs
may be used instead of net profit throughout this
calculation. See section 313 of the Economic Aid
Act. This calculation for Schedule F filers is
equivalent to proprietor expenses for Schedule C
filers.
21 Section 306 of the Economic Aid Act allows the
borrower to select a covered period between 8
weeks and 24 weeks.
37 This subsection was originally published at 85
FR 33004, subsection III.3.c. (June 1, 2020) and
amended by 85 FR 38304, subsection III.1.d (June
26, 2020) and has been modified to conform to
sections 308 and 344 of the Economic Aid Act and
for readability.
38 For First Draw PPP loans made in 2020,
borrowers use 2019. For First Draw PPP loans made
in 2021 and Second Draw PPP loans, borrowers use
the year (2019 or 2020) that was used to calculate
the borrower’s loan amount.
39 Use whichever year was used to calculate the
borrower’s loan amount.
40 Use whichever year was used to calculate the
borrower’s loan amount.
for a First Draw PPP Loan and that
report more than $150,000 in gross
income on the Schedule C that was used
to calculate the borrower’s loan amount
will not automatically be deemed to
have made the required certification
concerning the necessity of the loan
request in good faith. SBA may review
their certification that ‘‘Current
economic uncertainty makes this loan
request necessary to support the
ongoing operations of the Applicant.’’ If
SBA determines that a borrower lacked
an adequate basis for the required
certification concerning the necessity of
the loan request, SBA may determine
that the borrower was not eligible for
the loan, for the loan amount, or for loan
forgiveness.
d. Subsection (f)(7) of the interim final
rule for Second Draw PPP Loans (86 FR
3712, 3720) is revised to read as follows:
(7) The maximum amount of a Second
Draw PPP Loan to a borrower that has
income from self-employment and files
an IRS Form 1040, Schedule C, is
calculated as follows, depending on
whether the borrower has employees:
(i) For a borrower that has income
from self-employment and does not
have any employees, the maximum loan
amount is the lesser of:
(A) The product obtained by
multiplying:
(1) The net profit or gross income of
the borrower in 2019 or 2020, as
reported on IRS Form 1040, Schedule C,
that is not more than $100,000, divided
by 12; and
(2) 2.5 (or, only for a borrower
assigned a NAICS code beginning with
72 as defined in subsection (f)(10) at the
time of disbursement, 3.5). This amount
cannot exceed $29,167 for NAICS code
72 borrowers and $20,833 for all other
borrowers.
(ii) For a borrower that has income
from self-employment and has
employees, the maximum loan amount
is the lesser of:
(A) The product obtained by
multiplying:
(1) The sum of (i) one of the two
following options, up to $100,000; if
this amount is less than zero, set this
amount at zero (if you are using 2020
and have not yet filed a 2020 return, fill
it out and compute the value):
• The borrower’s net profit reported
on IRS Form 1040, Schedule C for 2019
or 2020, divided by 12; or
• line 7 from the borrower’s 2019 or
2020 IRS Form 1040, Schedule C, minus
lines 14, 19, and 26, divided by 12; and
(ii) the average total monthly payment
for employee payroll costs incurred or
paid by the borrower during the same
year elected by the borrower; by
(2) 2.5 (or, only for a borrower
assigned a NAICS code beginning with
72 at the time of disbursement as
defined in subsection (f)(10), 3.5); or
(B) $2,000,000.
e. Subsection IV.1.b.ii of the interim
final rule on loan forgiveness
requirements and loan review
procedures (86 FR 8283, 8287) is revised
to read as follows:
ii. Owner compensation replacement,
calculated based on 2019 or 202019 net
profit or proprietor expenses, if
applicable,20 as described in subsection
3.c. below; forgiveness of such amounts
is limited to either (a) the prorated
portion of 2019 or 2020 net profit or
gross income, if applicable, for a
covered period up to 2.5 months, or (b)
2.5 months’ worth (2.5/12) of 2019 or
2020 net profit or gross income, if
applicable, (up to $20,833) for a covered
period greater than 2.5 months,21
excluding any qualified sick leave
equivalent amount for which a credit is
claimed under section 7002 of the
Families First Coronavirus Response
Act (FFCRA) (Pub. L. 116–127) or
qualified family leave equivalent
amount for which a credit is claimed
under section 7004 of FFCRA;
f. Subsection IV.3.c of the interim
final rule on loan forgiveness
requirements and loan review
procedures (86 FR 8283, 8289) is revised
to read as follows:
c. Are there caps on the amount of
loan forgiveness available for owner-
employees and self-employed
individuals’ own payroll
compensation?37
Yes. Forgiveness is capped at 2.5
months’ worth (2.5/12) of an owner-
employee or self-employed individual’s
2019 or 202038 compensation (up to a
maximum $20,833 per individual in
total across all businesses). The
individual’s total compensation may not
exceed $100,000 on an annualized basis,
as prorated for the period during which
the payments are made or the obligation
to make the payments is incurred. For
example, for borrowers that elect to use
an eight-week covered period, the
amount of loan forgiveness requested for
owner-employees and self-employed
individuals’ payroll compensation is
capped at eight weeks’ worth (8/52) of
2019 or 2020 compensation (i.e.,
approximately 15.38 percent of 2019 or
2020 compensation) or $15,385 per
individual, whichever is less, in total
across all businesses. For borrowers that
elect to use a ten-week covered period,
the cap is ten weeks’ worth (10/52) of
2019 or 2020 compensation
(approximately 19.23 percent) or
$19,231 per individual, whichever is
less, in total across all businesses. For
a covered period longer than 2.5
months, the amount of loan forgiveness
requested for owner-employees and self-
employed individuals’ payroll
compensation is capped at 2.5 months’
worth (2.5/12) of 2019 or 2020
compensation (up to $20,833) in total
across all businesses.
In particular, C-corporation owner-
employees are capped by the prorated
amount of their 2019 or 202039
employee cash compensation and
employer retirement and health, life,
disability, vision and dental insurance
contributions made on their behalf. S-
corporation owner-employees are
capped by the prorated amount of their
2019 or 202040 employee cash
compensation and employer retirement
contributions made on their behalf.
However, employer health, life,
disability, vision and dental insurance
contributions made on their behalf
cannot be separately added; those
payments are already included in their
employee cash compensation. Schedule
C or F filers are capped by the prorated
amount of their owner compensation
replacement (calculated based on 2019
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41 For self-employed borrowers with no
employees that file IRS Form 1040, Schedule C,
who used gross income to calculate the loan
amount, proprietor expenses equal gross income.
For self-employed borrowers with employees that
file IRS Form 1040, Schedule C, who used gross
income to calculate the loan amount, proprietor
expenses equal the difference between gross income
and employee payroll costs. See subsections B.4.b
and B.11.b of the consolidated interim final rule
implementing updates to the PPP as amended by
this interim final rule. For self-employed borrowers
that file IRS Form 1040, Schedule F and have no
employees, gross income may be used instead of net
profit. For self-employed borrowers that file IRS
Form 1040, Schedule F and have employees, the
difference between gross income and employee
payroll costs may be used. See section 313 of the
Economic Aid Act.
67 This subsection was originally published at 85
FR 21747, subsection III.1.g. (Apr. 20, 2020) and has
been modified to conform to sections 304, 307, 308,
and 313 of the Economic Aid Act and for
readability.
68 See subsection (g)(2)(v) of the interim final rule
on Second Draw PPP Loans. 86 FR 3712, 3721 (Jan.
14, 2021).
69 For self-employed borrowers with no
employees that file IRS Form 1040, Schedule C,
who used gross income to calculate the loan
amount, proprietor expenses equal gross income.
For self-employed borrowers with employees that
file IRS Form 1040, Schedule C, who used gross
income to calculate the loan amount, proprietor
expenses equal the difference between gross income
and employee payroll costs. See subsections B.4.b
and B.11.b of the consolidated interim final rule
implementing updates to the PPP as amended by
this interim final rule. For self-employed borrowers
that file IRS Form 1040, Schedule F and have no
employees, gross income may be used instead of net
profit. For self-employed borrowers that file IRS
Form 1040, Schedule F and have employees, the
difference between gross income and employee
payroll costs may be used instead of net profit.
11 See Paycheck Protection Program Second
Chance Act, S. 3865, 116th Congress (introduced in
the Senate on June 2, 2020).
or 2020 net profit) or proprietor
expenses (calculated based on 2019 or
2020 gross income).41 General partners
are capped by the prorated amount of
their 2019 or 2020 net earnings from
self-employment (reduced by claimed
section 179 expense deduction,
unreimbursed partnership expenses,
and depletion from oil and gas
properties) multiplied by 0.9235. For
self-employed individuals, including
Schedule C or F filers and general
partners, retirement and health, life,
disability, vision or dental insurance
contributions are included in their net
self-employment income and therefore
cannot be separately added to their
payroll calculation. LLC members are
subject to the rules based on their LLC’s
tax filing status in the reference year
used to determine their loan amount.
g. Subsection IV.6.b of the interim
final rule on loan forgiveness
requirements and loan review
procedures (86 FR 8283, 8293) is revised
to read as follows:
b. What documentation are borrowers
who are individuals with self-
employment income who file an IRS
Form 1040, Schedule C or F required to
submit to their lender with their request
for loan forgiveness?67
For borrowers that received loans of
$150,000 or less that use the SBA Form
3508S, the borrower must submit the
certification and information required
by section 7A(l)(1)(A) of the Small
Business Act and, for a Second Draw
PPP Loan, revenue reduction
documentation if such documentation
was not provided at the time of
application.68 All other borrowers must
submit the certification required by
section 7A(e)(3) of the Small Business
Act, and (if the borrower has employees)
IRS Form 941 and state quarterly
business and individual employee wage
reporting and unemployment insurance
tax forms or equivalent payroll
processor records that best correspond
to the covered period (with evidence of
any retirement and group health, life,
disability, vision, and dental insurance
contributions). Whether or not the
borrower has employees, the borrower
must submit evidence of business rent,
business mortgage interest payments on
real or personal property, business
utility payments, or payments for a
covered operations expenditure,
covered property damage cost, covered
supplier cost, or covered worker
protection expenditure during the
covered period if the borrower used
loan proceeds for those purposes. This
documentation may include cancelled
checks, payment receipts, transcripts of
accounts, purchase orders, orders,
invoices, or other documents verifying
payments on nonpayroll costs.
For all loans, the 2019 or 2020 IRS
Form 1040, Schedule C or F that the
borrower provided at the time of the
PPP loan application must be used to
determine the amount of net profit or
proprietor expenses allocated to the
owner for the covered period.69
h. SBA has developed new Borrower
Application Forms for use by borrowers
that are Schedule C filers and elect to
calculate their loan amount using gross
income, as allowed under this interim
final rule. SBA Form 2483–C will be
used by such borrowers when applying
for First Draw PPP Loans and SBA Form
2483–SD–C will be used by such
borrowers when applying for Second
Draw PPP Loans. All references to the
Borrower Application Form in the
consolidated interim final rule
implementing updates to the PPP, the
interim final rule on second draw PPP
loans, and the consolidated interim final
rule on loan forgiveness requirements
and loan review procedures include the
SBA Form 2483–C and the SBA Form
2483–SD–C, as applicable.
2. Eligibility
The consolidated interim final rule
implementing updates to the PPP
provided, among other things, that a
PPP loan applicant is ineligible if an
owner of 20 percent or more of the
equity of the applicant has been
convicted of, pleaded guilty or nolo
contendere to, or commenced any form
of parole or probation (including
probation before judgment) for (1) a
felony involving fraud, bribery,
embezzlement, or a false statement in a
loan application or an application for
federal financial assistance within the
last five years, or (2) any other felony
within the last year. This provision
reflected the PPP eligibility
requirements as revised in an interim
final rule titled ‘‘Business Loan Program
Temporary Changes; Paycheck
Protection Program—Additional
Revisions to First Interim Final Rule,’’
published on June 18, 2020 (85 FR
36717). SBA has further reviewed these
eligibility restrictions and, in
consultation with Treasury, has
determined that modification to the
consolidated interim final rule
implementing updates to the PPP is
appropriate to ensure consistency with
Congressional intent to provide relief to
small businesses and their employees,
expand access to the PPP, and remove
barriers people with prior convictions
face when working to restart their lives
and contribute to our economy. SBA has
determined that the one-year lookback
restriction related to non-financial fraud
felonies should be removed and only
the five-year lookback restriction for
those felonies involving fraud, bribery,
embezzlement, or a false statement in a
loan application or an application for
federal financial assistance will limit an
applicant’s eligibility for the PPP.
Removing the one-year lookback
restriction related to non-financial fraud
felonies is consistent with
Congressional support for reducing
criminal background checks in the
PPP11 and the important policies
underlying recent criminal justice
reforms in Congress, such as last year’s
Fair Chance to Compete for Jobs Act of
2019 (Pub. L. 116–92, Div. A, Tit. XI,
Subtit. B,) and the First Step Act of 2018
(Pub. L. 115–391).
In light of the unique, emergency
nature of the PPP and the higher fraud
risk that exists due to the PPP’s
emphasis on speed in loan approvals
and disbursements, the remaining
restrictions on eligibility related to an
applicant or owner’s criminal history
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12 ‘‘Federal student loans’’ mean programs under
Parts B, D and E of the Higher Education Act of
1965, as amended, as well as other programs now
administered by the Department. These include
loans under the under the William D. Ford Federal
Direct Loan program, the Federal Family Education
Loan (FFEL) program, the Federal Perkins Loan
program, the Health Education Assistance Loan
(HEAL) program, and the Teacher Education
Assistance for College and Higher Education
(TEACH) Grant program if those awards have
converted into loans. These delinquencies include
loans owed directly to the Department of Education
as well as Federal student loans held by institutions
of higher education or those guaranteed or insured
by the Department of Education and which are held
by private lenders or guaranty agencies.
13 See 15 U.S.C. 636(a)(36)(P)(iv).
14 See letter from Department of Education to
Department of the Treasury requesting an
exemption under 31 CFR 285.13 of the ban on
Federal financial assistance to debtors with
delinquent Federal student loans, for the PPP
program, dated February 27, 2021.
15 See Department of Education, Coronavirus and
Forbearance Info for Students, Borrowers, and
Parents, https://studentaid.gov/announcements-
events/coronavirus.
will help mitigate the risk of default,
fraud, or misuse of PPP loan funds that
are intended to benefit small business
employees. By removing barriers for
applicants with non-financial fraud
felonies, this interim final rule balances
the need to increase access to the PPP
and remove barriers for people with
prior convictions while still ensuring
basic guardrails against fraud exist for
this emergency program. Preserving the
five-year lookback for financial fraud-
related felonies is one of these
guardrails.
The consolidated interim final rule
implementing updates to the PPP also
provided that a PPP loan applicant is
ineligible for a PPP loan if the applicant,
or any business owned or controlled by
the applicant or any of its owners, has
ever obtained a direct or guaranteed
loan from SBA or any other Federal
agency that is currently delinquent or
has defaulted within the last seven years
and caused a loss to the government.
SBA, in consultation with Treasury, has
decided to eliminate the restriction in
the consolidated interim final rule to the
extent it applies to Federal student
loans.12 SBA has determined that
eliminating consideration of delinquent
or defaulted Federal student loans is
appropriate to ensure consistency with
Congressional intent to provide relief to
small businesses and their employees
and expand access to the PPP. This
change will make PPP loans available to
more borrowers with financial need and
is consistent with Congress’s intent that
PPP loans be prioritized for small
business concerns owned and
controlled by socially and economically
disadvantaged individuals as defined in
section 8(d)(3)(c) of the Small Business
Act.13 According to the Department of
Eduction, ‘‘Black and Brown students
rely more heavily on student loan debt
than their peers and experience
delinquency at disproportionately high
rates. As a result prohibiting delinquent
student loan borrowers from obtaining
PPP loans is more likely to exclude
business owners of color from access to
the loans they need.’’14 In addition, this
change is consistent with the policy set
in section 3513 of the CARES Act and
the Department of Education’s ongoing
actions to provide economic relief to
student loan borrowers whose loans are
held by the agency by suspending
Federal student loan payments and
collections during the pandemic and
keeping the interest rate at 0 percent.15
At the request of the Department of
Education by letter dated February 27,
2021, Treasury also has granted an
exemption from the bar in 31 U.S.C.
3720B and 31 CFR 285.13, with respect
to PPP borrowers with Federal student
loans in delinquent status.
The change in PPP regulations
relating to Federal student loans and the
Treasury exemption apply to new PPP
applicants as well as those borrowers
who have already received a PPP loan.
In this way, PPP borrowers with
delinquent or defaulted student loan
debts are treated equally, without regard
to when they submitted their PPP
application. Although PPP applications
previously required applicants to
disclose whether they had a delinquent
Federal debt, student loan borrowers
may have been confused about the
status of their loans due to the current
suspension on the payment and
collection of Federal student loans or
uncertain about whether loans not
directly serviced or held by the
Department of Education constitute
Federal debt. This confusion may have
led some borrowers to make innocent
errors on their PPP application. For
these reasons, SBA will apply this
change to any First Draw PPP Loan or
Second Draw PPP Loan, regardless of
when the PPP loan was made.
Part IV.(e) of the interim final rule
titled ‘‘Business Loan Program
Temporary Changes; Paycheck
Protection Program Second Draw
Loans,’’ published on January 14, 2021
(‘‘Second Draw Interim Final Rule’’) (86
FR 3712), provides that an applicant is
not eligible for a Second Draw PPP Loan
if the applicant is excluded from
eligibility under the consolidated
interim final rule implementing updates
to the PPP. The following revisions to
Part III.B.2.a. of the consolidated interim
final rule implementing updates to the
PPP also affect eligibility for Second
Draw PPP Loans.
Therefore, subsections B.2.a.iii. and
B.2.a.iv of the consolidated interim final
rule implementing updates to the PPP
(86 FR 3692, 3698) are revised to read
as follows:
2. What businesses, organizations, and
individuals are ineligible?
a. Could I be ineligible even if I meet the
eligibility requirements in section 1?
You are ineligible for a PPP loan if, for
example:
* * * * *
iii. An owner of 20 percent or more
of the equity of the applicant is
presently incarcerated or, for any felony,
presently subject to an indictment,
criminal information, arraignment, or
other means by which formal criminal
charges are brought in any jurisdiction;
or has been convicted of, pleaded guilty
or nolo contendere to, or commenced
any form of parole or probation
(including probation before judgment)
for a felony involving fraud, bribery,
embezzlement, or a false statement in a
loan application or an application for
federal financial assistance within the
last five years; or
iv. You, or any business owned or
controlled by you or any of your
owners, has ever obtained a direct or
guaranteed loan from SBA or any other
Federal agency (other than a Federal
student loan made under Parts B, D, and
E of the Higher Education Act of 1965,
as amended, or other programs now
administered by the U.S. Department of
Education, which include the William
D. Ford Federal Direct Loan program,
the Federal Family Education Loan
(FFEL) program, the Federal Perkins
Loan program, the Health Education
Assistance Loan (HEAL) program, or the
Teacher Education Assistance for
College and Higher Education (TEACH)
program) that is currently delinquent or
has defaulted within the last seven years
and caused a loss to the government;
* * * * *
Subsection B.2.a. is amended to add
after subsection B.2.a.ix:
The exclusion of Federal student
loans from the restriction on applicants
with delinquent or defaulted Federal
debt in subsection (iv) applies to any
loan made pursuant to section 7(a)(36)
or 7(a)(37) of the Small Business Act,
including forgiveness of such a loan,
regardless of when the loan was made.
3. Additional Information
SBA may provide further guidance, if
needed, through SBA notices that will
be posted on SBA’s website at
www.sba.gov. Questions on the
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Paycheck Protection Program may be
directed to the Lender Relations
Specialist in the local SBA Field Office.
The local SBA Field Office may be
found at https://www.sba.gov/tools/
local-assistance/districtoffices.
Compliance With Executive Orders
12866, 12988, 13132 and 13563 the
Congressional Review Act, the
Administrative Procedure Act, the
Paperwork Reduction Act (44 U.S.C.
Ch. 35), and the Regulatory Flexibility
Act (5 U.S.C. 601–612)
Executive Orders 12866 and 13563
This interim final rule is
economically significant for the
purposes of Executive Orders 12866 and
13563. SBA, however, is proceeding
under the emergency provision at
Executive Order 12866 section 6(a)(3)(D)
based on the need to move
expeditiously to mitigate the current
economic conditions arising from the
COVID–19 emergency.
This rule is necessary to provide
economic relief to small businesses
nationwide adversely impacted under
the COVID–19 Emergency Declaration.
We anticipate that this rule will result
in substantial benefits to small
businesses, their employees, and the
communities they serve. However, we
lack data to estimate the effects of this
rule.
The Administrator of the Office of
Management and Budget’s Office of
Information and Regulatory Affairs
(OIRA) has determined that this is a
major rule for purposes of Subtitle E of
the Small Business Regulatory
Enforcement and Fairness Act of 1996
(also known as the Congressional
Review Act or CRA) (5 U.S.C. 804(2) et
seq.). Under the CRA, a major rule takes
effect 60 days after the rule is published
in the Federal Register. 5 U.S.C.
801(a)(3).
Notwithstanding this requirement, the
CRA allows agencies to dispense with
the requirements of section 801 when
the agency for good cause finds that
such procedure would be impracticable,
unnecessary, or contrary to the public
interest and the rule shall take effect at
such time as the agency promulgating
the rule determines. 5 U.S.C. 808(2).
Pursuant to §808(2), SBA for good cause
finds that a 60-day delay to provide
public notice is impracticable and
contrary to the public interest. Likewise,
for the same reasons, SBA for good
cause finds that there are grounds to
waive the 30-day effective date delay
under the Administrative Procedure
Act. 5 U.S.C. 553(d)(3).
The last day to apply for and receive
a PPP loan is March 31, 2021. Given the
short duration of this program, and the
urgent need to issue loans quickly, SBA,
in consultation with Treasury, has
determined that it is impractical and not
in the public interest to provide a
delayed effective date. An immediate
effective date will give small businesses
affected by this interim final rule the
maximum amount of time to apply for
loans and lenders the maximum amount
of time to process applications before
the program ends.
Executive Order 12988
SBA has drafted this rule, to the
extent practicable, in accordance with
the standards set forth in section 3(a)
and 3(b)(2) of Executive Order 12988, to
minimize litigation, eliminate
ambiguity, and reduce burden. The rule
has no preemptive effect but the change
to remove the eligibility restriction that
prevents businesses with owners who
are delinquent on their Federal student
loans from obtaining PPP loans is
retroactive to March 27, 2020.
Executive Order 13132
SBA has determined that this rule
will not have substantial direct effects
on the States, on the relationship
between the National Government and
the States, or on the distribution of
power and responsibilities among the
various layers of government. Therefore,
SBA has determined that this rule has
no federalism implications warranting
preparation of a federalism assessment.
Paperwork Reduction Act, 44 U.S.C.
Chapter 35
Paperwork Reduction Act, 44 U.S.C.
Chapter 35
SBA has determined that this rule
will require revisions to existing
recordkeeping or reporting requirements
of the Paycheck Protection Program
(PPP) information collections (OMB
Control Numbers 3245–0407 and 3245–
0417. The revisions will affect SBA
Form 2483, Borrower Application Form
Revised February 17, 2021, SBA Form
2483–SD, Second Draw Borrower
Application Form Revised February 17,
2021, SBA Form 2484, Lender’s
Application—Paycheck Protection
Program Loan Guaranty Revised January
8, 2021, and SBA Form 2484–SD,
Lender’s Application—Second Draw
Loan Guaranty. SBA Forms 2483 and
2483–SD were amended to implement
to the revisions to the criminal history
and delinquent student loan restrictions
as set forth in this interim final rule.
SBA Forms 2484 and 2484–SD were
amended to implement the new loan
amount calculation option for Schedule
C filers, and the revisions to the
criminal history and delinquent student
loan restrictions as set forth in this
interim final rule.
Additionally, to implement the new
loan amount calculation option for
Schedule C filers, SBA has developed
two new forms, SBA Form 2483–C, PPP
Borrower Application Form for
Schedule C Filers Using Gross Income,
and SBA Form 2483–SD–C, PPP Second
Draw Borrower Application Form for
Schedule C Filers Using Gross Income,
which are required for applicants who
are Schedule C filers and choose the
gross income loan amount calculation
option.
SBA has requested Office of
Management and Budget (OMB)
emergency approval of the revisions to
the information collections to give small
businesses affected by this interim final
rule the maximum amount of time to
apply for loans and lenders the
maximum amount of time to process
applications before the program ends.
Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (RFA)
generally requires that when an agency
issues a proposed rule, or a final rule
pursuant to section 553(b) of the
Administrative Procedure Act or
another law, the agency must prepare a
regulatory flexibility analysis that meets
the requirements of the RFA and
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604.
Rules that are exempt from notice and
comment are also exempt from the RFA
requirements, including conducting a
regulatory flexibility analysis, when
among other things the agency for good
cause finds that notice and public
procedure are impracticable,
unnecessary, or contrary to the public
interest. SBA Office of Advocacy guide:
How to Comply with the Regulatory
Flexibility Act, Ch.1. p.9. Since this rule
is exempt from notice and comment,
SBA is not required to conduct a
regulatory flexibility analysis.
Authority: 15 U.S.C. 636(a)(36); 15 U.S.C.
636(a)(37); 15 U.S.C. 636m; Coronavirus Aid,
Relief, and Economic Security Act, Pub. L.
116–136, section 1114 and Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and
Venues Act (Pub. L. 116–260), section 303.
Tami Perriello,
Acting Administrator, Small Business
Administration.
[FR Doc. 2021–04795 Filed 3–4–21; 8:45 am]
BILLING CODE 8026–03–P
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jbell on DSKJLSW7X2PROD with RULES

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