Treasury: Contemporaneous Guidance Applies to PPP Applications

Dear Community Banker:

ICBA has confirmed that any Paycheck Protection Program applications received by lenders prior to today can be processed based on guidance in effect prior to today, April 25, 2020. Any applications received by lenders today and moving forward will have to comply with new Treasury Department and SBA guidance.

The clarification was needed due to confusion about whether loan applications received by banks prior to or after the PPP exhausted its first round of funding need to comply with the new guidance issued by the agencies last night, April 24, 2020.

This guidance is consistent with question No. 17 in Treasury's frequently asked questions document, which states that borrowers and lenders may rely on the laws, rules, and guidance available at the time of the relevant application.

The clarification follows this weekend's release of additional resources for PPP participants, including:

• Updated FAQs confirming that agricultural producers, farmers, ranchers, and agricultural and other cooperatives can receive PPP loans if they meet eligibility requirements.
• A document on how to calculate maximum PPP loan amounts with detailed loan amount instructions for self-employed, farmers, S corporations, C corporations, LLCs, and nonprofits.
• An SBA notice with procedural guidance for PPP participation sales.
• An announcement that the SBA will resume accepting PPP loan applications at 10:30 a.m. (Eastern time) this Monday, April 27.
• An SBA interim final rule with additional guidance on the program.

All additional prior guidance can be found on Treasury’s PPP webpage.

The new law dedicates at least $30 billion for loans from institutions under $10 billion in assets and another $30 billion for those with between $10 billion and $50 billion in assets. This allocation reflects ICBA, affiliated state association, and community banker advocacy for policymakers to dedicate program funds for loans from community banks under $50 billion in assets.

ICBA will continue to keep you informed of the latest updates on the resumption of the PPP, including through our COVID-19 resource center, to support your efforts to meet the needs of your customers and communities.