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The Small Business Administration (SBA) has released updated FAQs for its paycheck protection program (PPP), as well as new documents on calculating first- and second-draw PPP loan amounts. The agency also extended deferment periods for all disaster loans, including the economic injury disaster loan (EIDL) program, until 2022.

In addition, the SBA's Office of Inspector General Monday released a flash report that found more than 4,000 PPP loans were made to borrowers with the same tax identification number or same business name and address, totaling $692 million. The SBA provided some reasons for the potentially duplicate loans, including a computer error and borrowers applying for PPP loans with more than one lender. The SBA plans to recover improper payments and prevent loan forgiveness on ineligible loans.

The new PPP FAQs include a question (No. 66) related to Schedule C filers' ability to use gross income to calculate PPP loan amounts. The SBA earlier this month released new application forms for these borrowers and the FAQ outlines options for lenders if the Schedule C borrower has already submitted a PPP loan application.

For first-draw PPP loans, the document on calculating loan amounts notes that "borrowers are permitted to use payroll costs from either calendar year 2019 or calendar year 2020." The document details 18 questions and answers to help different types of business owners calculate their maximum loan amounts and address various concerns.

The second-draw PPP loan calculation document separates questions and answers related to revenue reduction and maximum loan amounts.

In its release extending the deferment period for disaster loans, the SBA notes that:

• all SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note; and
• all SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.

For disaster loans approved before 2020 and in regular servicing status as of March 1, 2020, the SBA is granting an automatic additional 12-month deferment of principal and interest payments. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. The SBA flags that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.

Lawmakers this week are considering legislation that would extend the PPP by two months; it is currently set to expire March 31. NAFCU has raised concerns about the amount of loans backlogged due to hold codes and has called on the SBA to clear the codes before the program ends.

NAFCU will continue to advocate for program improvements and transparent guidance to ensure credit unions can lend effectively through the PPP.