In an interim final rule today, the Small Business Administration said it will limit the amount of Paycheck Protection Program loan funds that a corporate group can receive to $20 million. Businesses are considered part of a corporate group if “they are majority owned, directly or indirectly, by a common parent,” according to the rule.
The cap is effective today for outstanding loan applications and also applies to loans that have not yet fully been disbursed. Borrowers that are part of a corporate group that has received funds in excess of this amount are required to notify their lender and withdraw or cancel pending applications. Borrowers who fail to take these actions will not be eligible for loan forgiveness.
“A lender may rely on an applicant’s representation concerning the applicant’s compliance with this limitation,” SBA said in the rule. “This rule has no effect on lender obligations required to obtain an SBA guarantee for PPP loans.”
