Revised Report on the CARES Act Paycheck Protection Program (PPP) Loans – Use This Document to Guide Your Borrower Application

April 3, 2020 – This Update Replaces Those Dated on March 29 and 31, 2020

NPA’s Team GRC is keeping watch on new Guidance and a new Interim Final Rule for the Paycheck Protection Loan Program. The SBA issued a new application form for the PPP Loans late on April 2, 2020, which replaces the previous version. As the information and additional COVID-19 changes become available we will provide you with it.

This Update only covers what we have learned to date about the PPP loans. Yesterday, April 2nd, the SBA published a new Paycheck Protection Program Borrower Application Form, that is identified on the bottom left of each of the four pages as “SBA Form 2483 (04/20)”—only use this form if you have not already filed. This completed form, certifications, payroll records and tax documentation required must then be filed by your bank or other SBA approved lender. The bank or other SBA lender will have to certify certain information and apply their internal Bank Secrecy Act/Anti-Money Laundering programs, including customer-identification-programs and policies to your application. 

  • You can apply for these new PPP loans beginning today, April 3, 2020, for relief covering a period from February 15, 2020 to December 31, 2020.  All applications must be submitted before June 30, 2020.  
  • The applicable interest rate will be 1% and it will accrue during the six-month period during which you can defer repayment. 
  • PPP loan applicants will not need to provide collateral or personal guarantees by owners of 20% interests in the businesses. You will not be charged up-front fees by SBA lenders.  
  • You may apply for only one PPP loan.
  • You should expect to use 75% of the loan proceeds on payroll and related expenses, such as health care. Limiting use to 75% or less of the proceeds should make your business eligible for the maximum loan forgiveness available under the PPP.  
  • If you obtained an EIDL loan from January 31, 2020 to April 3, 2020, and used it to cover payroll expenses, you can use the PPP loan to refinance the earlier EIDL loan. 

Please pay careful attention to one last issue: It is less clear than we would like as to whether pawnbrokers will be eligible if their 2019 calendar revenues from interest and pawn charges was not more than 50% of their total revenues. Efforts to clarify eligibility  continue – through the NPA’s lobbyist, Cliff Andrews, and other sources in Washington. We will issue clarifications as we get reliable information. If your business cannot meet that greater than 50% of revenues came from sales, not pawn interest and charges, you should not certify that it does.  False certifications carry heavy potential penalties. 

 

This document is intended only as a summary of the CARES Act provisions described and does not constitute legal advice. Please consult your local lawyer for more information.

 

Copyright © National Pawnbrokers Association 2020. All rights reserved.