Today was the first day the Small Business Administration (SBA’s) processed applications for the groundbreaking Paycheck Protection Program. And the $349 billion allocated to the program is already going fast. By 9 a.m. community banks had processed 700 loans for $2.5 million, according to Treasury Secretary Steven Mnuchin. By early afternoon, Mnuchin tweeted that $1.8 billion had been processed – mostly by community banks – and Bank of America chimed in that it had received more than 60,000 loans for more than $6 billion.

tweet from Steven Mnuchin and reply from Bank of America

While some banks have clearly already started processing applications to the SBA, many are still working through questions pertaining to the program’s administration. Fifth-Third, for example, says it hopes to launch early next week. The best way to ensure you get your share of this program is to prepare as much as you can now, since this is a first-come, first-served process.

The process has been confusing for borrowers as well as for banks. Thursday night, the SBA released an updated application that made some significant changes to the form that was released just three days earlier on March 31. Generally, the changes from the first application to the second include:

  • Updated header to include a broader range of boxes to check for business type
  • Added the statutory requirement that if a business already received an EIDL, it can be added to max loan amount and refinanced. This is reflected in the max loan amount calculator
  • Removed the previous question 7 asking about the owner’s citizenship or permanent resident status
  • Added a question that the U.S. is the principal place of residence for all individuals included in the payroll numbers used to calculate the max loan
  • Added a question related to franchises
  • Removed the requirement that all 20% owners must sign the application – now just an authorized representative
  • Changed the Representations and Authorizations section to a Certifications and Authorizations section

Things that remained the same from the first application include that the certifications on page two still need to be initialed and that the application suggests using 2019 payroll numbers as opposed to the trailing 12 months from the Act’s text. While this is consistent with the prior application, we are hearing from banking partners that they will be requesting the trailing 12 months. As this situation evolves, we will keep you informed.

In addition to the updated application, the SBA also released the Interim Final Rule Thursday night. KJK broke down the most important provisions here.  Here are some highlights:

  • Independent contractors will not be included in an employer’s payroll and independent contractors must apply for their own loans
  • The interest rate for the loans has been set at 1%, up from previous Treasury Department guidance that announced a 0.5% interest rate
  • The term of the loans remains at the two years announced Tuesday by the Treasury Department

If you have questions about the Paycheck Protection Program, contact Kevin O’Connor at or 216.736.7213, Anne Corrigan at or 216.736.7227 or reach out to one of KJK’s Banking & Finance professionals.