Payroll Protection Program Update: Entities With Foreign Employees

The CARES Act created the Paycheck Protection Program ("PPP"), which amended the Small Business Act ("SBA") to provide short term loans to companies with fewer than 500 employees and other companies (such as those in the restaurant and hospitality industry). Such loans may be eligible for full forgiveness if used for payroll and other business expenses and all other statutory requirements are met. The SBA continues to issue guidance on a rolling basis, which can impact a company's eligibility for the loan, use of the loan, and the level of forgiveness

Entities with Foreign Employees Guidance

On May 18, 2020, the SBA posted an interim final rule mandating that foreign employees and employees of foreign affiliates must be included in employee headcount for purposes of determining PPP loan eligibility based on size. However, the SBA provided a safe harbor for borrowers who applied for a PPP loan prior to May 5, 2020. These borrowers will not be found to be