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. The Paycheck Protection Program would: • Support $349 billion in 100 percent guaranteed, low interest, no fee loans of up to$10 Section 1102 of the Act temporarily adds a new product, titled the “Paycheck Protection Program,” to the U.S. Small Business Administration's (SBA's) 7(a) Loan Program. For example, you needed to be “in business” on February 15, 2020. The PPP is designed to assist small businesses with 500 or fewer employees maintain payroll and pay for qualified expenses during the coronavirus quarantine period. Banks will need the following financial information in order to process the SBA loan application. %PDF-1.7 For-profit businesses %���� The SBA loans under Section 1102 of the CARES Act (sometimes referred to as “7(a) Loans”) which are eligible for forgiveness are available to employers with less than 500 employees. <> x��[�o��7��a�C���cI�+�9�h�4�qd���*RB�ι}gf�䒻��t�G)�ff�{F����/ߟ�{#��~�ߜ�o�G�L�_�R� �:]s|��_��������˷J�����#7%B�2�I��2�d W��M�*�M7����~|�9����'E$E|�E��,�H|)�����?��~��jY��!2�����^0a�,A����2�a��+q�K.�2�eu��>.�I��?�Q>��ʗP>]�~�D=�B��T?��1�.н%��O�I��4��K! You are not required to apply with any specific lender. This pr ogram is administered by the . 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 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. Apr 4. 636(a)) that was designed to assist small businesses nationwide adversely impacted by the COVID–19 emergency to pay payroll 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. Section 1102 of the Act establishes the PPP as a temporary addition to the SBA’s 7(a) loan program. 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). 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 PPP was created under section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (P.L. 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. 1102. The goal of this program is to enable employers to carry their payroll and other operating costs through this crisis. 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. No collateral for first $25,000. Under section 1102 of the CARES Act, a seasonal employer may determine its maximum loan amount for purposes of the PPP by reference to the employer’ average total monthly payments for payroll “the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.” On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . <> The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 … The U.S. Small Business Administration has also allowed for Additional Qualified Financial Institutions to be eligible as PPP Lenders under the authority of the U.S. Small Business Administration under CARES Act Section 1102. ^�T��{h\ܨ4v�����ϯ��0�$j�U�_�R����s������H�vͺA�i�+Q\xi��*}. <> References. Forum Moderator; Donors; 5,470 posts; State:--Report; Share; Posted April 4. Loan forgiveness section 1106 page 19 EDIL section 1110 page 26. %PDF-1.7 <> The self-certification requirement—or more accurately, the fluid nature of the self-certification requirement. Loans made under the PPP can be used to cover costs incurred during the period from February 15, 2020 to June 30, 2020. 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. The Coronavirus Aid, Relief and Economic Security Act (CARES) is an extensive stimulus package. CARES ACT Section 1102 Paycheck Protection Program. Q… ���/�z. 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). 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. endobj 1 0 obj However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … Summary. Hospital participation 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. 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 … <>/Metadata 92 0 R/ViewerPreferences 93 0 R>> 1. Written By Betsy Souer. 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. Table of contents. The Paycheck Protection Program was established by section 1102 of the CARES Act. 116-136) and generally allows businesses with fewer than 500 employees to borrow up to$10 million. 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 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 … 2 Quote; Link to post Share on other sites. <>/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>> Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. 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 … 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. 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. stream !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,��� 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. Section 5 provides a limited Safe Harbor with respect to certification concerning the need for a PPP loan. %���� endobj 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. Regarding forgiveness of the PPP loans, Section 1106(i) of the CARES Act deems forgiven PPP debt, that would otherwise be included in gross income, to be excluded from gross income. 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. Section 1102 of the CARES Act contained many rules that prevented many people from obtaining a PPP loan. SEC. Sec. Section 1102, created the PPP under section 7(a) of the Small Business Act. endobj As the administrator of the BSA, jklcpa. 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. An additional $310 billion was allocated under the Enhancement Act. Can be combined with PPP loan and PPP loan forgiveness, but this debt relief does not apply to a PPP loan. The receipt of the loan funds, including PPP funds, are not subject to income tax. <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> 2 0 obj endobj 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. Hospital participation in Small Business Administration (SBA) programs is typically limited by revenue. There is one main requirement, governed under section 1102 of the CARES Act that brought the PPP into effect. 3 0 obj endobj 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. 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 … Sec. Table of contents The table of contents for this Act is as follows: Sec. 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. 1 0 obj 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. The PPP is designed to assist small businesses nationwide adversely impacted by the coronavirus pandemic. The receipt of the loan funds, including PPP funds, are not subject to income tax. I have some anxious clients to talk to next week, this has given me a better understanding to help them. � ���Y��4�4�/�"k��y�O1i�R�ID��U/��X���8���Ȉ��w����x�f!�"�/�E. 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. 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. stream Paycheck Protection Program Flexibility Act of 2020. However, section 3(a) of the Flexibility Act extended the “covered period” as defined in section 1102 … That is because Section 1102, by itself, only allows the SBA to issue the PPP loans. PAYCHECK PROTECTION PROGRAM . 4 0 obj Section 1102 of the CARES Act provides for US$349 billion in funding for loans through the PPP, an expansion of the SBA’s existing 7(a) loan program 1 aimed at supporting small businesses and encouraging those businesses to retain their workers. (a) IN GENERAL.—Section 7(a) of the Small Business Act (15 U.S.C. x��=ko�H���?���B\D��f��@���Y��d�I���� ۊ-D�=��ć��WU�$ْl�5� ��棪��]����j=�:=_'?��v�^Oϯfɯo���������ۏ���r���,�~�? 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). 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. 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 Section 1102(a)(2)(G), the section outlining the PPP loans, explains the borrower requirements. contractors, and self-employed 500 or fewer employees Apply by June 30, 2020. Protection Program” in Section 1102, with additional modificatons made by the . 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”. Section 1106 of the CARES Act provides for the forgiveness of these PPP Loans in certain circumstances by converting the PPP Loans into grants. 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. 4 0 obj 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. 1. 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. Section 1106 of the Act provides for forgiveness of up Short title. That requirement? It says the borrower has to certify that “the eligible … 2. 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). 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. Posted April 4. jklcpa. Many of the people and companies that received a PPP loan already know and navigated these rules. Thank you, Dan. 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. endobj 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. Short title This Act may be cited as the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. 2 0 obj [��_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 @�� ��]�d)�KYW"�BIs�K@ 9�q�zT��4�S4 ��~NXU������B�� � Most of the requirements work simply. 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. 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. Section I - CARES Act Section 1102 - Paycheck Protection Program (PPP) and Section 1106 – Loan Forgiveness . 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. PPP is covered in section 1102 page 6. <>/Metadata 211 0 R/ViewerPreferences 212 0 R>> 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. Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. 2. 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 … 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 provides$350 billion for expedited individual loans up to $10 million through approved lenders that are guaranteed 100 percent by the U.S. government. CARES ACT – SEC. 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”). 636(a)(36)(O)) requires that PPP loans be risk-weighted at 0% under risk-based capital requirements. (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. 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 … Small Business Administration (SBA), with the support of the Department of Treasury. At first, the program’s funds dried up before reaching many businesses in need. 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. The loan is available for employers and 501(c)(3) organizations under 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. a. sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). 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. Section 1102 also waives SBA fees for borrowers and lenders, and provides processing fees to the lender from the SBA for servicing the loan. Unfortunately, one of the other murkier requirements has suddenly become terribly problematic. �5>ǁ������vrC�8��\$g�U�IUrJ�L���z�����l����[Qy����f���7���W�V�0�����N>]��?���|i.t��� However, following those rules does not mean the Government will discharge your PPP loan. Lender agreement to make SBA-guaranteed financing available as part of the CARES Act. The Section 1102 “paycheck protection program” statute sets forth a number of borrower requirements. 3. 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. CARES ACT – SEC. The Small Business Administration’s (“SBA”) release of its official loan forgiveness application under the Paycheck Protection Program (“PPP,” Section 1102 of the CARES Act) answered a number of questions that borrowers and their legal and accounting advisers had regarding the program. 3 0 obj 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. Checklist for Applying for a PPP Loan Checklist for Applying […] • The Paycheck Protection Program (PPP) under Section 1102 of the CARES Act provides forgivable loans to small businesses. On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation ” on February 15, 2020 short title this Act may be cited as the Coronavirus Aid, Relief and... 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