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SBA Clarifies Affiliation Rule for PPP Loans

May 7, 2020

In a recently issued update of its frequently asked questions (“FAQs”) on the Paycheck Protection Program (“PPP”), the Small Business Administration (“SBA”) has clarified the applicable affiliation rules for purposes of the PPP’s eligibility requirements.  

Specifically, an FAQ published on May 5, 2020, states that for purposes of the PPP’s 500 or fewer employee standard, an applicant must count all of its employees and the employees of its U.S. and foreign affiliates, absent a waiver of or an exception to the affiliation rules. 

Business concerns seeking to qualify for a PPP loan as a “small business concern” on the basis of the employee-based size standard must do the same. 

For further detailed discussion of the affiliation rules, see the SBA’s “Affiliation Rules Applicable to U.S. Small Business Administration Paycheck Protection Program.”

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