The CARES Act permits borrowers to refinance any existing SBA Economic Injury Disaster Loans made between January 31, 2020, and the date on which loans under the PPP are made available.
The requirement that a borrower “[u]se alternative financial resources . . . before seeking financial assistance” is often referred to as the credit elsewhere requirement.
As stated on the Small Business Administration’s Web site, its Section 7(a) loan program is its “primary program for providing financial assistance to small businesses. The terms and conditions, like the guaranty percentage and loan amount, may vary by the type of loan.” The PPP is a new Section 7(a) loan option.
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
ASC 835-30-15-3 states, in part, that “[w]ith the exception of guidance in paragraphs 835-30-45-1A through 45-3 addressing the presentation of discount and premium in the financial statements, which is applicable in all circumstances, and the guidance in paragraphs 835-30-55-2 through 55-3 regarding the application of the interest method, the guidance in this Subtopic does not apply to . . . (e) [t]ransactions where interest rates are affected by the tax attributes or legal restrictions prescribed by a governmental agency (for example, industrial revenue bonds, tax exempt obligations, government guaranteed obligations, income tax settlements).”
Forgivable loans are defined in paragraph 3 of IAS 20 as “loans which the lender undertakes to waive repayment of under certain prescribed conditions.”
See paragraphs 29 through 31 of IAS 20.
FASB Proposed Accounting Standards Update, Disclosures by Business Entities About Government Assistance.