Nearly twenty thousand South Dakota businesses were approved for "Paycheck Protection Program" loans through the Small Business Administration, coordinated in many cases by local banks. Lenders didn't know how to complete the process or advise clients. However, the good news is that the SBA will not pursue administrative enforcement against borrowers who repay the PPP loan after receiving notification from the SBA.
According to data released on the Small Business Administration website, about to $192.5 billion dollars have already been distributed to over 2.68 million businesses from April 27 through May 13 during the second round of the PPP, meaning over $120 billion in funds are still available. "In fact, to that very point, earlier this week the SBA came out with additional guidance that essentially says if you've borrowed less than $2 million, and you've made a good faith certification that you do in fact need the funding, we will not challenge", Asbury said.
The SBA loans do not have to be paid back if businesses follow the SBA guidelines for loan forgiveness.
"In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns", the SBA and Treasury said.
After many applications were submitted and accepted, the SBA (on April 14, 2020) changed course and said that partners in a partnership could be included in the PPP loan application for the business.
Dean Phillips, will eliminate provisions in the loans that mandate 75 percent of funds to go to payroll without repealing conditions that require employers to retain staff throughout the crisis.
Forgiveness will be prorated if payroll isn't maintained at levels seen before February 15 - so it will be reduced proportionally to how many jobs were cut or the amount by which salaries were reduced. The forgivable amount is reduced if owners cut jobs or wages, and the balance must be repaid at 1% interest in two years, with the first payment deferred for six months. (Shake Shack and the Lakers returned the money.) But there was confusion about eligibility, and some firms said they returned their loans "out of an abundance of caution" even if they believed they qualified for it.
Bank of Utah is reminding Paycheck Protection Program (PPP) loan recipients to be mindful of the important steps they need to take now, in order to be ready and eligible for loan forgiveness when their loan comes due in eight weeks.