SBA updates PPP FAQs

Federal Issues SBA Covid-19 Small Business Lending

On June 8, the SBA updated its Paycheck Protection Program (PPP) frequently asked questions to clarify certain conditions related to whether a nonprofit organization that has received approval of an application for tax exemption from the Puerto Rico Departamento de Hacienda qualifies as a “nonprofit organization” under section 7(a)(36)(A)(vii) of the Small Business Act. The FAQ discusses exemption criteria for certain nonprofit organizations, and specifies that SBA will treat a nonprofit organization that has obtained approval of its application for tax exemption from the Puerto Rico Departamento de Hacienda as meeting the definition of “nonprofit organization” under section 7(a)(36)(A)(vii) of the Small Business Act “if the nonprofit organization reasonably determines, in a written record maintained by the nonprofit organization, that it would be an organization described in section 501(c)(3) of the Internal Revenue Code (without regard to the notification requirement in section 508(a) of the Internal Revenue Code) and is therefore within a category of organizations that are eligible to be exempt from taxation under section 501(a), regardless of whether the nonprofit organization has applied for recognition from the Internal Revenue Service.” However, these nonprofit organizations must meet all other applicable eligibility criteria in order to receive a PPP loan and loan forgiveness, SBA emphasizes.

As previously covered by InfoBytes, the SBA stopped accepting new PPP loan guarantee applications on June 1.