On Friday March 27, 2020, the President signed into law, the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748) or “CARES Act,” providing for, among other things, the Paycheck Protection Program (“PPP”).
On Thursday April 2, 2020, the U.S. Small Business Administration (SBA) issued an interim final rule the “Initial Rule”), announcing the implementation of sections 1102 and 1106 of the CARES Act, relating, respectively, to the new PPP and forgiveness for qualifying loans under the PPP.
On Friday April 3, 2020, the SBA issued an interim final rule which is effective immediately and supplements the Initial Rule with additional guidance regarding the application of certain affiliate rules applicable to SBA’s implementation of sections 1102 and 1106 of the Cares Act (the “SBA Interim Rule on Affiliation”).
The SBA Interim Rule on Affiliation is available at: https://mcusercontent.com/
Among other things, the SBA Interim Rule on Affiliation provides that:
- For purposes of the PPP, the applicable affiliation rules are contained in 13 CFR § 121.301, pursuant to which entities may be considered affiliates based on factors including stock ownership, overlapping management and identity of interest. Click here for an overview of these PPP affiliation rules.
- The SBA’s affiliation rules, including those set forth in 13 CFR part 121, do not apply to the relationship of any church, convention or association of churches, or other faith based organization or entity to any other person, group, organization, or entity that is based on a sincere religious teaching or belief or otherwise constitutes a part of the exercise of religion. Click here to review new SBA rule § 121.103(b)(10) implementing this exemption for faith-based organizations.
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