The Small Business Administration says it will forgive almost 70% of all the Paycheck Protection Program loans it gave out. Limitations on Subcontracting (Mar 2020) (a) This clause does not apply to the unrestricted portion of a partial set-aside. SUMMARY: This rule amends the U.S. Small Business Administration's (SBA or Agency) regulations to implement provisions of the National Defense Authorization Act of 2013, which pertain to performance requirements applicable to small business and socioeconomic program set … Under the old rule, there was no such fixed percentage, however, the 70% figure was regularly used by SBA’s Office of Hearings and Appeals in its decisions. Question regarding recent SBA Final Rule A section from a publication summarizing a recent SBA Final Ruling has concerned management in my company: PUBLICATION segment: “From Kostos & Lamer, P.C. The so-called “70% rule” historically has existed only as a creation of the case law of the SBA Office of Hearings and Appeals. SBA will issue further guidance for those individuals who were not in operation in 2019, but who were in operation on February 15, 2020, and who will file a Form 1040 Schedule C for 2020. SBA believes that the current rule imposes an unnecessary burden on 8(a) Program participants and, as such, the final rule eliminates the need for participants to seek and receive approval from SBA for every initial JV agreement and each addendum to a JV agreement for competitive 8(a) contracts. On October 8, 2020, the SBA posted an alternative PPP Loan Forgiveness Application Form 3508S ("SBA Form 3508S") for borrowers with a PPP loan of $50,000 or less and an interim rule modifying the First Loan Review Rule regarding the lender's obligations when the SBA Form 3508S is … On Thursday, April 2, 2020, the SBA posted an Interim Final Rule implementing the PPP and on Friday, April 3, 2020 posted another Interim Final Rule providing guidance on calculating the number of a borrower’s employees for purposes of determining whether the borrower is a “small business concern” eligible for a loan under the PPP. SBA OHA Reaffirms 70% Threshold For Economic Dependence Affiliation. Generally, the SBAs new guidance has reduced the amount of red tape normally associated with forgiveness processes, clearing the way for forgiveness for nearly 70% of all PPP loans. In order to be awarded a full or partial small business set-aside contract with a value greater than the simplified acquisition threshold (as defined in the FAR at 48 CFR 2.101)” in paragraph (a) introductory text; and an 8(a) contract, an SDVO SBC contract, a HUBZone contract, a WOSB or EDWOSB contract pursuant to part 127 of this chapter, a small business concern must agree that: Over 300 MPs have backed the draft with the required minimum of 226 votes. Section 1651 revised and standardized the limitations on subcontracting, including the nonmanufacturer rule, that apply to small business concerns under FAR part 19 procurements. The SBA, in consultation with Treasury, will “promptly” issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the amendments to the PPP made in the new law, the statement said. Elimination of the “Three in Two Rule” Economic Dependence is a significant obstacle to the eligibility of many applicants desiring to gain 8(a) Certification for their business. The Interim Final Rule indicates that the SBA may review any PPP loan, and whether a borrower calculated the loan amount correctly and used loan proceeds for allowable uses in … SBA may presume an identity of interest and thus affiliation based upon economic dependence if a concern derived 70% or more of its receipts from another company over the previous three fiscal years. The rule … For instance, if a start-up secures just two contracts then one contract may skew the … SBA's final rule implements the statutory requirements of section 1651 of the NDAA for FY 2013 (15 U.S.C. The new guidance forgives PPP … The presumption may be overcome by a showing that the firm in question is not solely dependent upon another firm. In October, the U.S. Small Business Administration (SBA) published a final rule entitled "Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments," which went into effect on November 16, 2020.This final rule merges two existing mentor-protégé programs, revises SBA's affiliation rules, and makes other technical changes to clarify SBA's size requirements … part 121), the JV provisions (13 C.F.R. With over 30 years in the trenches of small business, I’m a Main Street business evangelist, author, and marketing veteran that makes the maze of small business lending accessible by weaving personal experiences and other anecdotes into a regular discussion of one of the biggest challenges facing small business owners today. The SBA has again amended its Criminal History Rule. 4439-d postponing until January 1, 2022, the obligation for entrepreneurs working within the simplified taxation system to use cash registers. June 15, 2016. Employer Firm Debt by Age (Percent) ... difficult to predict the effect of this rule on small firms’ Table 3. The new changes vastly expand the number of businesses that are eligible for PPP loans under the CARES Act. It is then up to the applicant firm to rebut the presumption by providing evidence that the applicant is not solely dependent upon the client firm. 657s). The Verkhovna Rada, Ukraine's parliament, has passed Bill No. Now if the 70% rule is applicable, that means the SBA will presume economic dependence between firms. SBA Review. April 24, 2015 May 4, 2017 cloveer.com 3 Comments Economic Dependence is a significant obstacle to the eligibility of many applicants desiring to gain 8(a) Certification for their firms. As prescribed in 19.507(e), insert the following clause:. SBA lending statistics show that in 2019, the average SBA loan was $417,314. This presumption is also rebuttable and the SBA gave examples of some rebutting evidence and acknowledged that OHA used that 70% as guidance as well as allowing that 70% to be rebutted. In merging the two programs, the rule also makes conforming amendments to SBA’s size regulations (13 C.F.R. The Small Business Administration has announced a plan that would forgive almost 70% of all the Paycheck Protection Program loans it gave out. The final rule implements certain provisions of the National Defense Authorization Act of 2013 (NDAA). The Punch Line: On Friday, May 15, the Small Business Administration published a new form entitled Loan Forgiveness Application Instructions for Borrowers which, at long last, provides a great deal of guidance on how to calculate loan forgiveness.. This is a fascinating case study and a great example of a firm forcing SBA to faithfully apply its own regulations. Do you meet the 70% Economic Dependency Rule? 8(a) Economic Dependency or the 70% Rule Explained Do you have all your eggs in one basket? The average SMB debt is around $195,000, as stats from 2016 reveal. According to the National Small Business Association, 73% of small firms used financing in the last 12 months. Under the Small Business Administration’s affiliation rules, one of the many ways a small business can be deemed affiliated with another is through the economic dependence rule: where a small business derives 70% or more of its revenues from another entity, the SBA ordinarily considers it to be economically dependent upon — and thus subject to the control of — that other entity. Start Preamble Start Printed Page 34243 AGENCY: U.S. Small Business Administration. Following is a summary of the forgiveness requirements. It was published on May 31, 2016, and became effective on June 30, 2016. 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