Paycheck Protection Program Application Forms for Lenders and Borrowers
The Small Business Administration issued a final borrower application form and interim final regulations which detail guidance on required data the federal government will require to guarantee PPP loans. These regulations were issued on April 2, 2020, the day before borrowers expected lenders to begin to process applications.
The new rules change the information the applicant will be required to provide to lenders by specifying that payroll documentation needs to be submitted to the bank. It is expected the majority of banks will utilize individual online applications which will incorporate the information required by the SBA. In addition to changing borrower Representations, Authorization and Certifications to correspond with the updated PPP guidance, the borrower application form includes changes in the following areas:
Business Information Section
- Includes additional business entity applicants,
- Adjusts the Average Monthly Payroll calculation to include an existing EIDL, less the applicable $10,000 advance, and
- Changes “Number of Jobs” to Number of Employees.”
Applicant Ownership Section
- Changes the requirement that Applicants list “all owners with greater than 20 percent ownership equity” to “all owners of 20 percent or more of the equity.”
- Modifies directions to Questions 5 and 6:
- Question 5 – Requires the applicant to certify, on behalf of himself (if an individual) and on behalf of any individual owning 20 percent or more of the equity of the applicant, whether they are subject to an indictment, criminal information, arraignment or other means by which formal criminal charges are brought in any jurisdiction, or presently incarcerated, or on probation or parole. If the answer to this question is YES, the application is denied.
- Question 6 – Required the applicant to certify, on behalf of himself (if an individual) and on behalf of all owners, whether in the last five (5) years, they i) have been convicted, ii) pleaded guilty, iii) pleaded nolo contendere, iv) been placed on pretrial diversion, or iv) been placed on any form of parole or probation (including probation before judgement)? This certification was previously only required of 20 percent or greater owners of record of the last seven years. If answered YES, the application is denied.
- Changes Question 7 – The new application amends this question to ask if the United States is the principal place of residence for all employees of the Applicant included in the Applicant’s payroll calculation. Previously, this question required that the applicant be a U.S. citizen or lawful resident, and if not, the application would be denied. While this means that foreign owned entities can qualify for a PPL, the affiliation and employee size rules require counting of all employees (both those of a domestic entity and the foreign affiliates).
- Now includes a Question 8 to determine whether the Applicant is a franchise that is listed on the SBA’s Franchise Directory.
Cherry Bekaert will continue to monitor developments around COVID-19 stimulus activities. For assistance with completion of your PPP application or to obtain access to CB advisors who can address questions applicable to your situation.
