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#Breaking: Treasury has released Interim Regulations for the #PaycheckProtectionProgram

I& #39;m about to review and break them down, but before doing so, I just want to quickly mention how incredible it is that @USTreasury got these out before tomorrow "Opening Day".

Sohttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👏" title="Clapping hands sign" aria-label="Emoji: Clapping hands sign">
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Note these Regs provide an IMMEDIATE INTERIM RULE, which means they are effective right away, despite not having undergone a (normally-required) comment period.

As a result, these are Regs which CAN be immediately relied on, but comments ARE requested for a 30-day period...
3/

Money IS desperately needed by businesses now, so it makes sense that the Congress and the SBA are streamlining the application and underwriting process.

But it& #39;s also kind of amazing we& #39;re about to give about $349 BILLION out based on what is essentially the "honor system"
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Not much new in 2a. Everything we already knew.
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Section 2b is helpful. Makes a few things crystal clear, like:

- Household employers (e.g. you pay your nanny) aren& #39;t eligible (No profit motive, so it& #39;s not a business!)

- No businesses illegal under Fed, State OR local law, so marijuana dispensaries are not eligible...
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Section 2e provides clarity on employees making more than $100k in compensation/year.

Notably their comp IS included in loan calc, up to $100k. I thought this was clear from #CARESAct, but received feedback from several saying they were flat out ignored in calc. They& #39;re NOT!
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Reinforcing the point from above, 2g makes clear, again, that it& #39;s the COMPENSATION of the employee in EXCESS of $100k that& #39;s excluded, NOT the entire employee!
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Despite initial statement (+ info sheet) from @USTreasury saying interest rate would be 0.5%, Interim Regs confirm Mnuchin statement earlier today... rate is 1%.

This is a HUGE win for lenders. Half a point on $349 billion/year is a lot of money! That& #39;s on top of orig fees!
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"Ample inducement"?

Not gonna lie... this part reeks of a bunch of bankers going to some old friends and saying "C& #39;mon, you can do better than that for me, can& #39;t you?"

Significant origination fees + 0.5% interest rate would have still had plenty of lenders in the mixhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🤷‍♂️" title="Man shrugging" aria-label="Emoji: Man shrugging">
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Good planning point here from Treasury.

You only get one crack at the PPP & #39;apple& #39;, so you should probably think about getting as much as you can while you can.
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Alternative title for Section 2m...

GET YOUR ASS IN GEAR!

(But seriously... if you want to get a piece of the action, you& #39;d better act quickly. Real quickly. Businesses are going to be lining up for the & #39;free money& #39;.
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OK... here& #39;s first significant news of the Regs...

Treasury confirms that a MAXIMUM of 25% of loan proceeds can be used for non-payroll expenses.

Sorta runs counter to plain language of CARES Act, but they& #39;re gonna interpret liberally here to preserve program $ for payroll
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And only 25% of the amount of the loan that is forgiven can be attributable to non-payroll costs.
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A reminder via 2t that while this is basically an honor system loan, you DO have to certify that the economic uncertainty makes the loan NECESSARY.

Economic uncertainty = highly likely right now.

Necessity? Definitely more of a judgment call.
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If it can be easily shown that your loan was not necessary, and you clearly lied on your application in an effort to get some & #39;free& #39; cash, the penalties can be... errrr... severehttps://abs.twimg.com/emoji/v2/... draggable="false" alt="🤕" title="Face with head-bandage" aria-label="Emoji: Face with head-bandage">
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