The latest iteration of the ever-evolving Paycheck Protection Program (PPP) rules focuses on disbursements. Here are the key takeaways from the April 28 Sixth Interim Final Rule (SIFR):
- PPP borrowers may not take multiple draws from a PPP loan. Loans must be disbursed within 10 calendar days of approval. A loan is considered approved when the loan is assigned a loan number by the SBA (an ETRAN number).
Comment: Most of us never thought that multiple disbursements were possible anyway given the logistics. But the Treasury had opened the door previously by saying that the eight-week covered period started with the first disbursement. So it looks like when the SBA said first disbursement they meant only disbursement.
- But the SIFR then changes the start date for the eight-week period, at least for some taxpayers. For loans that received an SBA ETRAN loan number prior to April 28, but which have not yet been fully disbursed: (i) the 10 calendar-day period for disbursement began on April 28, and (ii) the eight-week covered period began on the date of first disbursement.
- Loans that have not been disbursed because of a borrower’s failure to submit required documentation within 20 days of the loan approval shall be cancelled by the lender. Again, it is important to remember that the loan is considered approved when the loan is assigned a loan number by SBA.
- The SBA will publish a new SBA Form 1502 on which PPP lenders will report on PPP loans and collect their processing fees on fully-disbursed loans. Lenders must electronically upload SBA Form 1502 within 20 calendar days after a PPP loan is approved or, for loans approved before availability of the updated SBA Form 1502, by May 18.