PPP Under Two Million Given a Break

The Office of Inspector General (OIG) begins its review of the Small Business Administration’s (SBA’s) implementation of the Paycheck Protection Program (PPP) provisions of Section 1102 of the Corona virus Aid, Relief, and Economic Security (CARES) Act.
Thus far:
1,661,000 loans granted in first funding totaling nearly $342.3 billion dollars
and an additional 2,441,369 loans, totaling about $183.5 billion.

As we move forward there still remains confusion and unanswered questions.

How will underserved and rural markets get loans?
How to provide butts in seats proof of employees for forgiveness?
How will deferments of loans be granted?
Why is the information publicly registered?
How to account as cash or accrual?
How are small business to prove they don't have capital to repay?


Today, the SBA released a new FAQ which addresses one question. According to SBA FAQ #46, any borrower (combined with its affiliates) with a PPP loan amount below $2 million , will “be deemed to have made the required certification concerning the necessity of the loan request in good faith.” This is due to the reasoning that borrowers with loan amounts below this threshold are less likely to have access to other sources of cash flow than borrowers who receive loans above the $2 million threshold. This means they do not have to hire a CPA, pay a grant writer and an auditor to review their books.

As time rolls forward and these new programs bring up more questions, hopefully your local bank and the SBA will have all the right answers. 

I know of seven small business owners who applied and received funding, and one who did not get funding from his existing bank who was overwhelmed. All are operating and employing the same number of persons who work to support the business and their families

Wish you all health and prosperity, now is the time for growth mode let us help each other on the path.
Update 5/27/2020 all things are liquid and please be safe out there
“Loan Forgiveness Application” (SBA Form 3508) that walks the user through a series of calculations, the outcome of which is the amount of loan forgiveness the borrower can claim. 

The form is complicated and requires study.  The press release announcing the form’s publication promises additional guidance will be forthcoming.

I do see some helpful clarifications in the form which address some of the detailed questions that businesses have been asking.  I have highlighted three of them in the press release below. 

Release Date: May 15, 2020                 Contact:, (202) 205-7036
Release Number: 20-41                          Follow us on TwitterFacebookBlogs Instagram


SBA and Treasury Release Paycheck Protection Program

Loan Forgiveness Application

WASHINGTON—Today, the U.S. Small Business Administration, in consultation with the U.S Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. 
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles [see “Alternative Payroll Covered Period” on page 1 of the form]
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30  [see “FTE Reduction Safe Harbor” on pages 8 and 9 of the form]
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined  [see “FTE Reduction Exceptions” on page 8 of the form]

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.  The documents released today will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.


VA borrower paid


Va only allows Borrower paid closing cost  up to 1% with restrictions on other allowable fees. I hope this helps clarify how the Veterans Administration protects military from over paying for a mortgage