CARES Act Small Business Loans Move Forward but with Significant Revisions

In the early morning hours of April 3, 2020, SBA has released an overhauled Paycheck Protection Program (PPP) loan application form (SBA Form 2483) and Treasury has posted a draft temporary Interim Final Rule implementing Sections 1102 and 1106 of the CARES Act. Since the passage of the legislation a week ago and with only limited preliminary guidance and now-superseded applications from both Treasury and SBA, businesses and lenders have been scrambling to understand loan eligibility, how to apply, as well as key loan terms. The new SBA Form 2483 and the draft Interim Final Rule reflect significant developments since the legislation and prior guidance, and, SBA has cautioned that additional guidance is still forthcoming on such essential issues as affiliation analysis, loan forgiveness, advance purchase for loans sold in the secondary market, and religious liberty protections under the PPP. As soon as possible, we will be issuing a client alert with a summary of the most significant changes or guidance. In the days ahead, we will be providing a revised, detailed summary of the PPP and eligibility questionnaire as well as scheduling another webinar so companies can stay current. The Crowell & Moring team is working with clients across many industries, and we hope you will reach out with questions.