Today, the U.S. Small Business Administration (SBA) issued its interim final rule on sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) regarding the Paycheck Protection Program, a new addition to the SBA’s 7(a) Loan Program.

Section 1106 of the CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. The Paycheck Protection Program and loan forgiveness are intended to provide economic relief to small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration issued by President Trump on March 13, 2020.

This interim final rule outlines the key provisions of SBA’s implementation of sections 1102 and 1106 of the Act and provides guidance to lenders who plan to issue Paycheck Protection Program loans.

The Interim Final Rule clarifies lenders’ underwriting obligations and states that interest rates will be one percent (1%) per annum for Paycheck Protection Loans. Initially, the interest rate was expected to be one-half of one percent (0.5%).

Click here to read a copy of the Interim Final Rule.

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