2
SECTION 2. BACKGROUND
.01 Overview.
(1) The PPP is a loan program administered by the U.S. Small Business
Administration (SBA) and the Administrator of the SBA (Administrator) as part of the
SBA’s “7(a) Loan Program” under § 7(a) of the Small Business Act (15 U.S.C.
§ 636(a)).
1
Congress established the PPP to assist small businesses nationwide
adversely impacted by the COVID–19 pandemic in paying payroll costs and other
eligible expenses.
2
Under the PPP, the Administrator may guarantee the full principal
amount of a “covered loan,” as defined in § 7(a)(36)(A)(ii) of the Small Business Act,
which for purposes of the PPP is a loan made under the PPP to an “eligible recipient,”
as defined in § 7(a)(36)(A)(iv) of the Small Business Act, during the period beginning on
February 15, 2020, and ending on May 31, 2021 (PPP First Draw Loan).
3
Under
§ 7(a)(37) of the Small Business Act, the Administrator may guarantee under the same
terms, conditions, and processes as a PPP First Draw Loan the full principal amount of
a subsequent loan made under the PPP to an “eligible entity,” as defined in
§ 7(a)(37)(A)(iv) of the Small Business Act, that has used or will use the full amount of a
1
See §§ 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act),
Public Law 116-136, 134 Stat. 281, 286-94, 297-301 (Mar. 27, 2020), as amended by §§ 2 and 3 of the
Paycheck Protection Program Flexibility Act of 2020, Public Law 116-142, 134 Stat. 641 (June 5, 2020);
the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) enacted
as Title III of Division N of the Consolidated Appropriations Act, 2021 (CAA), Public Law 116-220,
134 Stat. 1182 (Dec. 27, 2020); § 276 of the COVID-related Tax Relief Act of 2020 (COVID Tax Relief
Act), enacted as Subtitle B of Title II of Division N of the CAA; and § 2 of the PPP Extension Act of 2021,
Public Law 117-6, 135 Stat. 250 (Mar. 30, 2021). Section 304(b)(1)(A) of the Economic Aid Act
redesignated § 1106 of the CARES Act (15 U.S.C. § 9005) as § 7A and transferred redesignated § 7A to
be inserted to appear after § 7 of the Small Business Act (15 U.S.C. § 636).
2
See Business Loan Program Temporary Changes; Paycheck Protection Program, 85 FR 20811
(Apr. 15, 2020).
3
See § 7(a)(2) of the Small Business Act and § 2 of the PPP Extension Act of 2021.