The U.S. Small Business Administration (SBA) and U.S. Department of the Treasury (DoT) have released a guidance to implement the Paycheck Protection Program Flexibility Act (PPPFA), signed into law by President Trump on June 5, the agencies reported on Monday.
The guidance will expand eligibility for businesses with owners who have past felony convictions. Under PPPFA, SBA has revised provisions relating to loan maturity, deferral of loan payments, and forgiveness provisions, which was announced on April 2.
In addition, as an exercise of SBA's policy discretion in furtherance of President Trump's leadership and bipartisan support on criminal justice reform, the eligibility threshold for those with felony criminal histories has been changed.
The new guidance will reduce the look-back period from 5 years to 1 year to determine eligibility for applicants or owners of applicants that have been convicted, pleaded guilty, pleaded nolo contendere or been placed on any form of parole or probation for non-financial felonies.
The period will continue to implement the 5 year rule for felonies including fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The PPPFA will also eliminate pretrial diversion status as a criterion affecting eligibility.
SBA issued revised PPP application forms to conform to these changes. SBA will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the PPPFA in the near future, the agency reported.
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations.
