New PPP guidance for felony convictions

The Small Business Administration (SBA) and the Treasury Department issued new Paycheck Protection Program (PPP) guidance along with a revised borrower application form. 

Specifically, the new guidance issued expands PPP eligibility for businesses with owners who have past felony convictions, the National Lumber and Building Material Dealers Association reports.

Under the new guidance, the eligibility threshold for those with felony criminal histories has been changed. The look-back period has been reduced from 5 years to 1 year to determine eligibility for applicants, or owners of applicants, who, for non-financial felonies, have:

1. been convicted,
2. pleaded guilty,
3. pleaded no contendere, or
4. been placed on any form of parole or probation (including probation before judgment). 

The period remains five years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The application also eliminates pretrial diversion status as a criterion affecting eligibility.

SBA has revised the PPP borrower application to conform to these changes. SBA says it will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the Paycheck Protection Program Flexibility Act in the near future.