Shifting guidance from the Small Business Administration and the Trump administration has essentially created competing versions of the Paycheck Protection Program — and small businesses are caught in the crossfire, experts say.
When the program was introduced April 3, the SBA’s guidance at the time required businesses only certify and attest that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant” — a relatively low bar given the number of companies affected by the coronavirus’ rapid spread.
The SBA has tweaked a handful of rules since — regarding eligibility, covered expenses and what forgiveness would ultimately look like, for instance — but initial applicants in the first PPP round had this assurance to rely on from the agency: “Borrowers and lenders may rely on the laws, rules and guidance available at the time of the relevant application.”
However, more recent SBA counsel, as well as the Trump administration’s response to the backlash against some larger and publicly traded companies receiving funds, now seem to conflict with that, suggesting that businesses may be subject to dual rules regardless of whether they applied in the first or second round of the program — and experts don’t have clarity on which will apply to whom, or how to win maximum forgiveness for beneficiaries.