The FNB Blog

The PPP program has been vital for many businesses.  Although there was much confusion, we have worked to get through the origination phase and are preparing to work through the forgiveness phase. However, every day, we get new directives from SBA and even new legislation from Congress.

The meat of the IFR that we are interested in is the Loan Forgiveness Process.  In the Paycheck Protection Program Forgiveness Application blog previously posted you can access the application.  All of this subject to change and there is a proposal in Congress that may change things yet again.  The potential changes may be really beneficial to some businesses by extending the forgiveness period, and several will not notice a difference in their forgiveness amount. As always, who knows if Congress will do anything, or change things more drastically than we can imagine.

Good news or bad news?  Who knows, but at least we do now have the Paycheck Protection Program Forgiveness Application.  While this is nice to have, I would be prepared for changes, especially as certain borrowers are advocating for changes that would be more realistic and helpful.   In any case, SBA places the responsibility for accuracy on the borrower to accurately submit the information in the forgiveness application.

The SBA has now added a significant test to the Paycheck Protection Program for determining borrower eligibility in addition to the initial test of whether an applicant could certify the need for funding due to economic uncertainty. Now, the SBA is saying that borrowers and would-be borrowers are also required to evaluate their funding alternatives. While the SBA did not reinstate the “Credit Elsewhere” test from traditional 7(a) small business loans, the SBA has stated they will begin to scrutinize borrower’s liquidity alternatives to raising funding.

Ag/Farmer/Rancher PPP Eligibility

On March 27th, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This package appropriated $349 billion for the Paycheck Protection Program (PPP). The PPP is a guaranteed loan program administered by the Small Business Administration (SBA). The purpose of the program is to support small businesses and help support their payroll during the coronavirus situation.