New IG report says SBA's rules for PPP loan forgiveness could result in an "unintended burden." Cites concerns about requirement that 75pc of funds go to payroll. Says tens of thousands of borrowers from PPP Round 1 would not meet the threshold
The SBA IG report is here sba.gov/sites/default/…
SBA IG on PPP: "Our review of data from round one found that tens of thousands of borrowers would not meet the 75-percent payroll cost threshold and would therefore have to repay the amount of nonpayroll costs in excess of 25 percent in less than 2 years."
SBA IG recommendation to SBA: "Evaluate the potential negative impact to borrowers regarding the specified percentage of loan proceeds eligible for forgiveness and update the requirements, as deemed necessary."
SBA IG: "We found the formal guidance in SBA’s Interim Final Rule did not align with the allowable use requirements for PPP loans."
SBA IG says SBA didn't issue PPP lender guidance mandated by Congress about prioritizing small businesses in underserved and rural markets. He recommends that SBA release those guidelines and start collecting demographic information via PPP applications
The SBA is declining to comment on the IG's recommendations.
The new SBA IG report breaks down what Congress told SBA to do with PPP and where SBA landed in its rules and FAQ’s, sometimes taking a more conservative approach than was specified in the law 
Read my story on the SBA IG's report: politico.com/news/2020/05/0…
