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SBA Posts New PPP Questions; In Process of Updating Others

SBA has posted three new questions to its FAQ document on PPP while also stating that it is in the process of updating the answers to the other 53 questions in light of changes made by the Economic Aid Act, which went into effect December 27, 2020. The new questions relate to FinCEN, Bank Secrecy Act/Anti-Money Laundering, and public broadcasting stations, and are copied below for ease of reference. In addition, SBA issued new FAQs on shuttered venue operators grants, which can be found here

Are FinCEN’s April 2020 Frequently Asked Questions regarding the Paycheck Protection Program (PPP) applicable to Second Draw PPP Loans?  

Yes. The FinCEN April 2020 PPP Frequently Asked Questions (FAQs) apply to Second Draw PPP Loans. If you have general questions about requirements related to customer due diligence or beneficial ownership, please click here.  

For purposes of Bank Secrecy Act/Anti-Money Laundering compliance, can a PPP lender rely on the same information received from a borrower for the purposes of a First Draw PPP Loan for a Second Draw PPP Loan to that same borrower?  

The information a lender obtained from a borrower in connection with a First Draw PPP Loan can be relied upon by that lender for a Second Draw PPP Loan application if the borrower is an existing customer. Decisions regarding the updating of customer due diligence and the verification and updating of the beneficial ownership information collected from customers should be made consistent with the guidance for both existing customers and new customers set forth in the previous April 2020 FAQs and in this FAQ, and pursuant to the lender’s risk-based approach to Bank Secrecy Act compliance.  

How does the 500-employee limit for First Draw PPP Loans and the 300- employee limit for Second Draw PPP Loans apply to a public broadcasting station if a college or university operates or holds the license for the station and the station is not a separate legal entity?  

Subsection B.1.g.vi of the consolidated interim final rule implementing updates to the PPP, 86 FR 3692 (Jan. 14, 2021), and subsection c.4 of the interim final rule for Second Draw PPP Loans, 86 FR 3712 (Jan. 14. 2021), apply the 500- and 300-employee limits, respectively, based on the number of employees “per location” of the public broadcasting station. This limit on the number of employees per location applies to the public broadcasting station itself and does not include other employees of a college or university that operates or holds the license for the station.  

The full FAQ from SBA may be found here

By, Alex Paniagua