SBA Clarifies PPP Disbursement Rules - COVID-19 Legislation

On April 28, 2020 the Small Business Administration released an Interim Final Rule addressing disbursement of loans under the Paycheck Protection Program (“PPP”).  Under this rule, PPP loans must be disbursed in a single lump sum within ten days of loan approval.

The rule also contains two transition rules for entities that have received a portion of their loan.  For PPP loans, for which a loan number has been issued, but the full amount has not been disbursed, the ten-day clock for disbursing the remaining funds starts on April 28, 2020.  So, for any loans that have not been fully disbursed, the remainder must be disbursed by May 8, 2020.  The rule also states that the eight-week period for calculating PPP loan forgiveness starts the day a business received the first disbursement of loan proceeds.

Additionally, PPP loans that have not been disbursed because a borrower has not submitted required loan documentation within 20 calendar days of loan approval will be cancelled by the lender, subject to the transition rules above.

The full text of the rule can be found here.

If you have any questions related to this legislation, please contact your attorney at Pedersen & Houpt or the attorneys below and we will answer your questions and walk you through the program.

Larry Byrne  
Attorney at Law
161 North Clark Street, Suite 2700
Chicago, Illinois 60601
312-261-2155
lbyrne@pedersenhoupt.com

Eric J. Kordish
Attorney at Law
161 North Clark Street, Suite 2700
Chicago, Illinois 60601
312-261-2249
ekordish@pedersenhoupt.com

Matthew J. Schmidt
Attorney at Law
161 North Clark Street, Suite 2700
Chicago, Illinois 60601
312-261-2281
mschmidt@pedersenhoupt.com

David A. Martin
Attorney at Law
161 North Clark Street, Suite 2700
Chicago, Illinois 60601
312-261-2286
dmartin@pedersenhoupt.com