The deadline to apply for the Paycheck Protection Program is fast approaching. The deadline to apply is Tuesday, June 30. Approximately $144 billion remains available, and the rush on the forgivable loans has slowed.
With the program’s application deadline now just a week away, the Small Business Administration (SBA) and Department of the Treasury (“Treasury”) announced late Friday that SBA will make additional data available to the public to provide additional transparency into the $659 billion program. For every borrower with a loan $150,000 or more, SBA will disclose the business name, address, NAICS code, zip code, business type, demographic data, nonprofit information, the number of jobs supported, and the loan amount (as a range).
The loan amount ranges are as follows: (1) $150,000‒$350,000; (2) $350,000‒$1,000,000; (3) $1,000,000‒$2,000,000; (4) $2,000,000‒$5,000,000; and (5) $5,000,000‒$10,000,000. According to SBA, this accounts for nearly 75% of the loan dollars approved. Data on loans under $150,000 will also be released, but it will be aggregated by zip code, industry, business type and demographic data.
Calls for transparency and loan oversight began as soon as the program’s first $349 billion in funding was exhausted. Criticism grew when it was revealed that the Los Angeles Lakers had received a $4.6 million loan and the publicly traded company that owns the restaurant chain Ruth’s Chris Steak House received a $20 million loan. Amid public scrutiny, Treasury asked all publicly traded companies that received PPP loans to return them.
Then, after Congress approved an additional $310 billion in funding, SBA established a safe harbor for allowing borrowers to return their loans—no questions asked—and under the assumption that any borrower returning its loan would be deemed to have made the certification that the loan was necessary in good faith. Ultimately, SBA clarified that all applications for loan forgiveness over $2 million will be reviewed.
The enhanced transparency announced by SBA and Treasury does not shield other information about borrowers from disclosure. The PPP loan application makes clear that SBA must disclose certain information about borrowers if served with a Freedom of Information Act request, including the names of a borrower’s officers, directors, stockholders or partners, the amount of the borrower’s loan and the loan’s maturity. A borrower’s proprietary data will not routinely be made available to third parties.
Statistics from approvals through June 20 show that 4,666,560 loans have been made and the average PPP loan size is $110,000. Only 4,816 loans exceed $5 million, whereas 3,064,366 loans are $50,000 or less. Small businesses who want a PPP loan but who have not yet applied should contact their lender as soon as possible to ensure they meet the June 30 application deadline.
Click here to read more Brownstein alerts on the legal issues the coronavirus threat raises for businesses.
This document is intended to provide you with general information regarding Paycheck Protection Program deadlines. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.
The information in this article is accurate as of the publication date. Because this law in this area is changing rapidly, and articles are not automatically updated, continued accuracy cannot be guaranteed.