General PPP Affiliation Rules However, the detailed affiliation standards in 13 CFR 121.103 currently do not apply to PPP borrowers, because § 121.103(a)(8) provides that applicants in SBA’s Business Loan Programs (which include the PPP) are subject to the affiliation rules contained in 13 CFR 121.3011.

Does PPP loan forgiveness add to shareholder basis?

An S corporation shareholder increases basis for his or her allocable share of tax-exempt income. The PPP rules, as discussed previously, specifically provide that a shareholder’s portion of excluded PPP loan forgiveness passes through to each shareholder as tax-exempt income, within the meaning of Sec.

Who decides on PPP forgiveness?

Applying for PPP loan forgiveness Applications for loan forgiveness are processed by your lender. You need to fill out a PPP loan forgiveness application form and submit that to your lender. After you submit your application for forgiveness, your lender is required by law to provide you with a response within 60 days.

What is an affiliate for PPP purposes?

A PPP loan applicant is an affiliate of an individual, concern or entity that owns or has the power to control more than 50 percent of the business’s voting equity.

Do you have to include affiliates in PPP loan?

A borrower needs to include all domestic and foreign affiliates unless an affiliation waiver applies when calculating headcount.

Can a PPP loan over$ 2 million be reviewed?

The updated FAQ #53 clarifies that the SBA is reviewing all First Draw PPP Loans of $2 million or more and as part of the process, the SBA is requiring the Loan Necessity Questionnaire. The updated FAQ #53 and the SBA’s prior guidance that the “necessity” certification must have been made in good faith at the time of the loan application.

When do you have to pay back a PPP loan?

If the borrower does not apply for loan forgiveness within 10 months after the last day of the maximum covered period of 24 weeks, or if the SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred and the borrower must begin paying principal and interest.

Can a second draw PPP loan be aggregated?

Updated FAQ #46 and #53 confirmed that Second Draw PPP Loan borrowers will be deemed to have made the required certification concerning necessity and the loan amounts for First Draw PPP Loans and Second Draw PPP Loans will not be aggregated. As such, only First Draw PPP Loans meeting the threshold will be subject to the “necessity” questionnaire.