SBA issued an interim final rule (IFR) to implement changes made to the Paycheck Protection Program (PPP) by the American Rescue Plan Act, enacted on March 11. Changes include: 

Shuttered Venue Operator (SVO), Page 6: 

If a PPP borrower receives a First Draw or Second Draw PPP Loan after December 27, 2020, the amount of any subsequently-approved SVO grant will be reduced by the amount of the First Draw or Second Draw PPP Loan.  

If a PPP borrower receives both a First Draw and a Second Draw PPP Loan after December 27, 2020, the amount of any subsequently-approved SVO grant will be reduced by the combined amount of both PPP loans. 

If a PPP applicant is approved for an SVO grant before SBA issues a loan number for the PPP Loan, the applicant is ineligible for the PPP loan and acceptance of any PPP loan proceeds will be considered an unauthorized use.  

Clarifying Changes, Pages  6 and 10 

SBA made a clarifying change to add, to the list of eligible entities for First Draw PPP Loans, businesses with a NAICS code beginning with 72 that employ no more than 500 employees per physical location. 

SBA also incorporated changes of eligibility for electronic cooperatives and telephone cooperatives. For PPP loans made after the effective date of the IFR, electronic cooperatives and telephone cooperatives are eligible if they have no more than 300 employees per physical location. (Previously, the employee cap to be eligible was no more than 500 employees.) Also, these entities are no longer permitted to use the employee-based SBA size standard for their industry or SBA’s alternative size standard to determine size. 

Payroll Costs Not Eligible for Loan Forgiveness, Pages 21-23 

The following payroll costs are not eligible for loan forgiveness: 

(a) qualified wages taken into account in determining  

(i) The Employee Retention Credit under section 2301 of the CARES Act, as amended by section 206 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act);  

(ii) The Employee Retention Credit under section 3134 of the Internal Revenue Code; or 

(iii) The disaster credit under section 303 of the Relief Act, and Premiums for COBRA continuation coverage taken into account in determining the credit under section 6432 of the Internal Revenue Code. 

The IFR is effective upon publication in the Federal Register. The provisions which incorporate the American Rescue Plan Act changes to PPP apply to PPP loans approved, and forgiveness applications submitted, on or before March 11, 2021.