50214 Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 

8 5 U.S.C. 603, 604. 

9 44 U.S.C. 3506; see 5 CFR part 1320, appendix 

A.1. 

date provisions of the APA are 

unnecessary, impracticable, or contrary 

to the public interest with respect to 

these final amendments to Regulation D. 

The rate change for IORB that is 

reflected in the final amendment to 

Regulation D was made with a view 

towards accommodating commerce and 

business and with regard to their 

bearing upon the general credit situation 

of the country. Notice and public 

comment would prevent the Board’s 

action from being effective as promptly 

as necessary in the public interest and 

would not otherwise serve any useful 

purpose. Notice, public comment, and a 

delayed effective date would create 

uncertainty about the finality and 

effectiveness of the Board’s action and 

undermine the effectiveness of that 

action. Accordingly, the Board has 

determined that good cause exists to 

dispense with the notice, public 

comment, and delayed effective date 

procedures of the APA with respect to 

this final amendment to Regulation D. 

IV. Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’) does not apply to a rulemaking 

where a general notice of proposed 

rulemaking is not required.8 As noted 

previously, the Board has determined 

that it is unnecessary and contrary to 

the public interest to publish a general 

notice of proposed rulemaking for this 

final rule. Accordingly, the RFA’s 

requirements relating to an initial and 

final regulatory flexibility analysis do 

not apply. 

V. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (‘‘PRA’’) of 1995,9 the 

Board reviewed the final rule under the 

authority delegated to the Board by the 

Office of Management and Budget. The 

final rule contains no requirements 

subject to the PRA. 

List of Subjects in 12 CFR Part 204 

Banks, Banking, Reporting and 

recordkeeping requirements. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board amends 12 CFR 

part 204 as follows: 

PART 204—RESERVE 

REQUIREMENTS OF DEPOSITORY 

INSTITUTIONS (REGULATION D) 

■ 1. The authority citation for part 204 

continues to read as follows: 

Authority: 12 U.S.C. 248(a), 248(c), 461, 

601, 611, and 3105. 

■ 2. Section 204.10 is amended by: 

■ a. Revising paragraph (b)(1); 

■ b. Removing paragraphs (b)(4) and (5) 

and (d)(5); and 

■ c. Redesignating paragraph (d)(6) as 

paragraph (d)(5). 

The revision reads as follows: 

§ 204.10 Payment of interest on balances. 

* * * * * 

(b) * * * 

(1) For balances maintained in an 

eligible institution’s master account, 

interest is the amount equal to the 

interest on reserve balances rate (‘‘IORB 

rate’’) on a day multiplied by the total 

balances maintained on that day. The 

IORB rate is 0.15 percent. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2021–19280 Filed 9–7–21; 8:45 am] 

BILLING CODE 6210–01–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Parts 121 and 123 

[Docket Number SBA–2021–0016] 

RIN 3245–AH80 

Disaster Loan Program Changes 

AGENCY: U.S. Small Business 

Administration (SBA). 

ACTION: Interim final rule. 

SUMMARY: This interim final rule 

implements changes to the Disaster 

Loan Program regulations. For 

applications for COVID–19 Economic 

Injury Disaster (COVID EIDL) loans, in 

this rule SBA is changing the definition 

of affiliation, the eligible uses of loan 

proceeds, and application of the size 

standard to certain hard-hit eligible 

entities, and is establishing a maximum 

loan limit for borrowers in a single 

corporate group. In addition, for all 

disaster assistance programs, in this 

rule, SBA is changing which SBA 

official may make the decision on the 

appeal of an application that has been 

declined for a second time. 

DATES: 

Effective date: The provisions of this 

interim final rule are effective 

September 8, 2021. 

Applicability dates: The change to the 

regulation at 13 CFR 123.13 applies to 

applications submitted under all of 

SBA’s Disaster Loan Programs on or 

after September 8, 2021. The changes to 

the regulation at 13 CFR 123.303 apply 

to COVID EIDL loan proceeds available 

on or after September 8, 2021, without 

regard to the date such proceeds were 

received from SBA. The other changes 

in this interim final rule apply to 

applications submitted under the 

COVID EIDL Program on or after 

September 8, 2021, through December 

31, 2021, or until funds available for 

this purpose are exhausted, whichever 

is earlier. Additionally, with the 

exception of the regulation at 123.304, 

this interim final rule applies to original 

applications under the COVID EIDL 

Program that are submitted before but 

approved on or after September 8, 2021. 

Comment date: Comments must be 

received on or before October 8, 2021. 

ADDRESSES: You may submit comments, 

identified by number SBA–2021–0016 

through the Federal eRulemaking Portal: 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

SBA will post all comments on 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at www.regulations.gov, please 

send an email to COVIDEIDLHelp@

sba.gov. All other comments must be 

submitted through the Federal 

eRulemaking Portal described above. 

Highlight the information that you 

consider to be CBI and explain why you 

believe SBA should hold this 

information as confidential. SBA will 

review the information and make the 

final determination whether it will 

publish the information. 

FOR FURTHER INFORMATION CONTACT: An 

SBA Disaster Customer Service 

Representative at (800) 659–2955 

(individuals who are deaf or hard of 

hearing may call (800) 877–8339), or a 

local SBA Field Office; the list of SBA 

field offices can be found at https://

www.sba.gov/tools/local-assistance/ 

districtoffices. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

Section 7(b)(2) of the Small Business 

Act authorizes SBA to make EIDL loans 

to eligible small businesses and 

nonprofit organizations located in a 

disaster area. 15 U.S.C. 636(b)(2). On 

March 6, 2020, Congress deemed 

COVID–19 to be a disaster in Title II of 

the Coronavirus Preparedness and 

Response Supplemental Appropriations 

Act of 2020, Public Law 116–123, 134 

Stat. 146, 147, allowing SBA to declare 

disasters and make EIDL loans available 

to small businesses and nonprofit 

organizations suffering substantial 

economic injury as a result of the 

COVID–19 pandemic. The Coronavirus 


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Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50215 

Aid, Relief, and Economic Security Act 

(CARES Act) Public Law 116–136, 

expanded eligibility and waived certain 

rules and requirements for COVID EIDL 

loans. Section 1110 of the CARES Act 

permitted SBA to waive rules related to 

personal guaranties on COVID EIDL 

loans of not more than $200,000 and the 

requirement that an applicant be unable 

to obtain credit elsewhere. Section 1110 

also provided SBA with the authority to 

approve an applicant based solely on 

the credit score of the applicant or use 

alternative appropriate methods to 

determine an applicant’s ability to 

repay. On April 24, 2020, the Paycheck 

Protection Program and Health Care 

Enhancement Act (PPP Enhancement 

Act) Public Law 116–139, provided 

additional funding for SBA to make 

EIDL loans and further expanded EIDL 

eligibility to include agricultural 

enterprises with not more than 500 

employees, which are typically not 

eligible for SBA disaster assistance. 

Prior to the enactment of the PPP 

Enhancement Act, SBA had an existing 

$1.1 billion in credit subsidy funding, 

which it used to support between $7 

billion and $8 billion in EIDL loans to 

businesses affected by the COVID–19 

pandemic. The PPP Enhancement Act 

provided an additional $50 billion in 

loan credit subsidy to SBA. See 15 

U.S.C. 636(b) and 13 CFR 123.300(c). On 

December 27, 2020, the Economic Aid 

to Hard-Hit Small Businesses, 

Nonprofits, and Venues Act (Economic 

Aid Act), Public Law 116–260, was 

enacted as part of the Consolidated 

Appropriations Act, 2021. Section 332 

of the Economic Aid Act extended the 

authority to make COVID EIDL loans 

through December 31, 2021, and further 

modified the terms under which SBA 

approves COVID EIDL loans, and 

Section 331 provided SBA authority to 

make targeted EIDL advances. On March 

11, 2021, the American Rescue Plan Act 

(ARPA), Public Law 117–2, was 

enacted, establishing the Restaurant 

Revitalization Fund (RRF) through 

Section 5003 to provide assistance to 

restaurants, beverage alcohol producers, 

and other entities, and providing 

authority to provide supplemental 

Targeted Advances. 

In light of the COVID–19 emergency, 

many small businesses nationwide have 

experienced economic hardship as a 

direct result of the Federal, State, and 

local public health measures that have 

been taken to minimize the public’s 

exposure to the virus. These measures, 

some of which were governmentmandated, were implemented across the 

country. In addition, based on the 

advice of public health officials, other 

measures, such as keeping a safe 

distance from others or stay-at-home 

orders, were implemented, resulting in 

a dramatic decrease in economic 

activity as the public avoided malls, 

retail stores, and other businesses. On 

March 16, 2021, the SBA announced 

that it would extend deferment periods 

for all disaster loans, including COVID 

EIDL loans, until 2022. COVID EIDL 

loans made in calendar year 2020 will 

have the first payment due date 

extended from 12 months to 24 months 

from the date of the note. COVID EIDL 

loans made in calendar year 2021 will 

have the first payment due date 

extended from 12 months to 18 months 

from the date of the note. On March 24, 

2021, the SBA announced that it would 

increase the maximum amount that can 

be borrowed under the COVID EIDL 

program from $150,000 (6 months of 

economic injury) to $500,000 (24 

months of economic injury). 

II. Comments and Immediate Effective 

Date 

This interim final rule is being issued 

without advance notice and public 

comment. SBA has determined that 

there is good cause for dispensing with 

advance public notice and comment on 

the ground that it would be 

‘‘impracticable’’ and ‘‘contrary to the 

public interest.’’ 5 U.S.C. 553(b)(3)(B). 

The intent of the statutory COVID 

financial assistance programs, including 

the COVID EIDL program, is that SBA 

provide relief to America’s small 

businesses expeditiously. This intent, 

along with the continuing decrease in 

economic activity in key economic 

sectors as compared to 2019 and the 

reimposition of mask requirements and 

other public-health measures 

throughout the country because of the 

variants (including Delta) of COVID–19, 

provides good cause for SBA to 

dispense with advance notice and 

comment rulemaking, which would take 

months. Given that this rule is issuing 

in August, new changes could not go 

into effect until November, leaving just 

a few weeks to implement the new 

program and take applications before 

funding expires. This shortened 

program timeframe would be 

problematic because SBA believes, with 

basis, there is a tremendous demand 

and need for this program. Other SBA 

COVID relief programs have recently 

ended or have exhausted their funding 

(including the Paycheck Protection 

Program and the Restaurant 

Revitalization Fund), yet businesses and 

nonprofit organizations are still in need 

of support. As evidence of unmet need, 

the Restaurant Revitalization Fund 

received $28.6 billion in appropriations 

to provide assistance to the restaurant 

industry, but within 21 days, SBA 

received 278,304 applications seeking 

assistance in amounts totaling more 

than $72 billion, nearly three times the 

amount appropriated. Funding was 

quickly exhausted, leaving 177,300 

businesses without assistance. Further, 

with the end of the Paycheck Protection 

Program, businesses and nonprofit 

organizations that are still struggling 

will turn to the COVID EIDL program for 

long-term recovery. Thus, the COVID 

EIDL program is more critical now than 

it was before, because of the lack of 

resources available through these other 

programs and because of the continuing 

economic instability. Issuing this rule 

without advance notice and comment 

will give small businesses, nonprofit 

organizations, qualified agricultural 

businesses, and independent contractors 

affected by this interim final rule the 

maximum amount of time to apply for 

COVID EIDL loans, and will give SBA 

the maximum amount of time to process 

applications before the program ends in 

less than five months—on December 31, 

2021. In addition, 13 CFR 123.1 reserves 

to SBA authority to revise disaster 

regulations without advance notice, by 

publishing interim emergency 

regulations in the Federal Register. 

Finally, given the short duration of 

this program and the unmet need for 

immediate assistance in key economic 

sectors, SBA has determined that it is 

impractical and not in the public 

interest to provide a delayed effective 

date. 5 U.S.C. 553(d). Limiting the 

availability of this program to a few 

weeks, given the needs, would result in 

significant avoidable economic losses— 

precisely the result that Congress was 

trying to avoid in passing and amending 

the COVID EIDL program. Therefore, 

SBA is of the view that delaying 

issuance to conduct notice and 

comment procedures would effectively 

void the effectiveness of these reforms 

to the COVID EIDL program, with 

significant harms resulting. Although 

this interim final rule is effective 

immediately, comments are solicited 

from interested members of the public 

on all aspects of the interim final rule. 

SBA will consider these comments and 

the need for making any revisions as a 

result of these comments. 

III. Disaster Loan Program Changes 

1. Definition of Affiliation for COVID 

EIDL Loans 

Based on continuing confusion and 

burdensome analyses required by 

applicants and SBA, to simplify the 

program requirements of COVID EIDL 

such that applicants can more easily 


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complete the affiliation analysis and to 

expand the number of entities that will 

be eligible for COVID EIDL loans, SBA 

will align the definition of affiliation for 

COVID EIDL with the definition of 

‘‘affiliated business’’ set forth in section 

5003 of the ARPA for the Restaurant 

Revitalization Fund (RRF). Like the RRF 

program, COVID EIDL is a program 

where an applicant applies directly to 

SBA, without an intermediary lender to 

explain program rules and ensure 

compliance. In SBA’s regular Business 

Loan Programs, the applicant relies on 

the lender intermediary to correctly 

interpret and apply the affiliation rules 

at 13 CFR 121.301, which require an 

applicant to consider affiliation based 

on ownership, stock options, 

convertible securities, agreements to 

merge, management, identity of interest, 

and franchise and license agreements. 

Congress mandated more simple 

affiliation rules in ARPA for RRF. Given 

the lack of intermediaries in the COVID 

EIDL program, SBA has determined that 

it is appropriate to use the same 

affiliation rules that Congress mandated 

for RRF. 

Therefore, SBA is revising 13 CFR 

121.301, ‘‘What size standards and 

affiliation principles are applicable to 

financial assistance programs?’’, to add 

a new paragraph (g) to state that for 

COVID EIDL loans, an affiliated 

business or affiliate is ‘‘a business in 

which an eligible entity has an equity 

interest or right to profit distributions of 

not less than 50 percent, or in which an 

eligible entity has the contractual 

authority to control the direction of the 

business, provided that such affiliation 

shall be determined as of any 

arrangements or agreements in existence 

as of January 31, 2020.’’ The new 

paragraph (g) also will include a cross 

reference to the exceptions to affiliation 

set forth in 13 CFR 121.103(b), which 

continue to apply to COVID EIDL loans. 

In addition to simplifying the program 

requirements for COVID EIDL loans, this 

change will streamline the application 

process for SBA and facilitate the 

review of such applications prior to the 

deadline of December 31, 2021. This 

streamlining will expand the flow of 

funds to businesses and nonprofit 

organizations that still need relief from 

the COVID–19 pandemic. 

2. Second Decline of Loan Application 

The regulation at 13 CFR 123.13, 

‘‘What happens if my loan application 

is denied?’’, requires that applicants 

appeal a second decline of a loan 

application directly to the Director, 

Disaster Assistance Processing and 

Disbursement Center (DAPDC). To 

enable timely consideration of appeals, 

SBA is changing the appeals process to 

allow the Director, DAPDC, or the 

Director’s designee(s), to make the 

decision on appeals for all Disaster Loan 

Program loans. In addition, SBA is 

revising the regulation to clarify that the 

Administrator, solely within the 

Administrator’s discretion, has the 

authority to review the matter and make 

the final decision. 

Therefore, SBA is revising the 

regulation at 13 CFR 123.13, paragraphs 

(e) and (f), to state that, if SBA declines 

an application a second time, the 

Director, DAPDC, or the Director’s 

designee(s), will make the decision. 

Further, SBA is revising the regulation 

to state that the Administrator, solely 

within the Administrator’s discretion, 

may choose to review the matter and 

make the final decision. Such 

discretionary authority of the 

Administrator does not create additional 

rights of appeal on the part of an 

applicant not otherwise specified in 

SBA regulations. The changes to this 

regulation apply to all SBA Disaster 

Loan Programs. 

3. Eligible Entities for COVID EIDL 

Loans 

The Administrator has determined 

that, due to the extended duration and 

scope of the COVID–19 pandemic, as 

well as due to mandatory Federal, state, 

and local shut down and social 

distancing orders, businesses in certain 

sectors of the North American Industry 

Classification System (NAICS) continue 

to suffer from significant economic 

hardship. Specifically, the NAICS 

sectors and subsectors identified in 

Section 1112 of the CARES Act, as 

amended by section 325 of the 

Economic Aid Act, continue to need 

substantial help. These include Sector 

61, Educational Services; Sector 71, 

Arts, Entertainment and Recreation; 

Sector 72, Accommodation and Food 

Services; Subsector 213, Support 

Activities for Mining; Subsector 315, 

Apparel Manufacturing; Subsector 448, 

Clothing and Clothing Accessories 

Stores; Subsector 451, Sporting Good, 

Hobby, Book, and Music Stores; 

Subsector 481, Air Transportation; 

Subsector 485, Transit and Ground 

Passenger Transportation; Subsector 

487, Scenic and Sightseeing 

Transportation; Subsector 511, 

Publishing Industries (except internet); 

Subsector 512, Motion Picture and 

Sound Recording Industries; Subsector 

515, Broadcasting (except internet); 

Subsector 532, Rental and Leasing 

Services; and Subsector 812, Personal 

and Laundry Services. 

Additionally, certain industries were 

identified in Section 5003(a)(4) of the 

ARPA for additional assistance but may 

not have received funding due to 

program deadlines or the exhaustion of 

funds. As stated previously, the 

Restaurant Revitalization Fund (RRF) 

was unable to provide help to all 

eligible applicants due to a lack of 

funding, and many small businesses in 

that industry continue to suffer 

economic hardships caused by the 

pandemic. Most businesses eligible for 

RRF are in NAICS sector 72, 

Accommodation and Food Services; 

however, beverage manufacturers in 

NAICS Industry Group 3121, such as 

breweries, wineries, and distilleries 

were also eligible for RRF funding. 

Based on publicly available industry 

research and input from industry trade 

groups, SBA believes these beverage 

manufacturers continue to require 

additional help. 

Under Section 1110 of the CARES 

Act, COVID EIDL loans are available to 

‘‘small business concerns, private 

nonprofit organizations, and small 

agricultural cooperatives,’’ as defined in 

SBA’s size standards in 13 CFR 121.201, 

or businesses that have 500 or fewer 

employees. To provide assistance to a 

greater number of businesses in the 

hard-hit industries described above, 

SBA is defining ‘‘small business 

concern’’ for purposes of the COVID 

EIDL program to extend eligibility to 

businesses in those industries that have 

500 or fewer employees per physical 

location. SBA is revising 13 CFR 

123.300, ‘‘Is my business eligible to 

apply for an economic injury disaster 

loan?’’, by adding a new paragraph (e) 

to state that certain hard-hit businesses 

identified by specific NAICS 

classifications will be able to qualify as 

eligible small business concerns for 

COVID EIDL loans based on the number 

of employees per physical location. 

Consistent with the standard in RRF, 

businesses using the per-physical 

location eligibility standard must, 

together with affiliates, have no more 

than 20 locations. 

This rule merely provides an added 

basis of eligibility for COVID EIDL 

assistance. It does not make any entity 

that is eligible for COVID EIDL 

assistance on another basis ineligible for 

such assistance. For example, a business 

that has more than 20 business 

locations, but has fewer than 500 

employees in the aggregate of all of its 

business locations is currently eligible 

for COVID EIDL loans because it meets 

the 500-employee size standard. 

Although this rule allows a business 

concern to be eligible for COVID EIDL 

assistance if it employs not more than 

500 employees per physical location as 

long as it (together with its affiliates) has 


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Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50217 

no more than 20 locations, that 

provision does not change the current 

eligibility of a business concern that 

meets the general 500-employee size 

standard. For example, a business with 

25 locations and 15 employees per 

location would not be ineligible, 

because the total number of employees 

is 375. 

This rule also does not change the 

applicable size standards. The size 

standard itself remains at 500 

employees (together with affiliates), as 

authorized by Section 1110(a)(2) of the 

CARES Act, or the size standard 

established in 13 CFR 121.201. Instead, 

the rule changes how the agency defines 

the term ‘‘business concern’’ for 

purposes of COVID EIDL assistance. The 

Small Business Act provides SBA with 

broad authority to define a ‘‘small 

business concern.’’ 15 U.S.C. 632(a)(2). 

By regulation, SBA generally defines a 

concern to be a business entity, 

although there are exceptions. 13 CFR 

121.105. SBA applies its size standards 

to determine whether a concern is a 

small business eligible for SBA 

assistance, and, because of the general 

definition, the size standards generally 

apply at the entity level. In this interim 

final rule, based on how SBA applied 

the PPP’s size standard at the perphysical location level for NAICS 

sector-72 businesses and other 

industries, SBA is adopting a programspecific definition of ‘‘business 

concern’’ as covering each individual 

physical location for industries in 

certain hard-hit economic sectors. As 

such, SBA will apply the program’s size 

standards at the physical-location level 

for the identified industries. This does 

not change the size standards that apply 

to the COVID EIDL loan program. 

Instead, this program-specific provision 

changes the level at which the size 

standard applies—for businesses in 

certain sectors—i.e., to each physical 

location, rather than to each entity in 

the aggregate. 

4. COVID EIDL Uses of Proceeds 

Currently, the EIDL program only 

permits loan proceeds to be used for 

working capital necessary to carry the 

business until resumption of normal 

operations and for expenditures 

necessary to alleviate the specific 

economic injury and does not permit 

payments on Federal debt or 

prepayment of non-Federal existing debt 

even if the debt has a balloon payment 

due. Prior to the pandemic, businesses, 

in the ordinary course of their 

operations, managed debt payments 

through cash flows of the business. Due 

to mandatory COVID–19 closures, some 

businesses did not have sufficient cash 

flow to service debt obligations. Despite 

several short-term emergency programs 

in the CARES Act and other statutes, 

many small businesses have not been 

able to return to normal operations, and 

now struggle with deferred debt, past 

due payments, and insufficient cash 

flow. With the expectation that the 

pandemic would not last for the 

duration that it has, many businesses 

took on short-term debt, often with 

unfavorable repayment terms, or 

negotiated deferments in debt payments 

in order to avoid default. In order to 

maximize relief from the debt burden 

businesses and nonprofit organizations 

have accrued, SBA is expanding COVID 

EIDL eligible uses of proceeds to 

include payments on all forms of 

business debt, including loans owned 

by a Federal agency (including SBA) or 

a Small Business Investment Company 

(SBIC) licensed under the Small 

Business Investment Act. COVID EIDL 

loan proceeds may be used to make debt 

payments including monthly payments, 

deferred interest, and pre-payment of 

business debt, except that pre-payments 

will not be permitted on any debt 

owned by a Federal agency (including 

SBA) or an SBIC. COVID EIDL loan 

proceeds may be used to pay debt 

incurred both before and after 

submitting the COVID EIDL loan 

application. 

Therefore, SBA is revising the 

regulation at 13 CFR 123.303, ‘‘How can 

my business spend my economic injury 

disaster loan?’’, to permit COVID EIDL 

working capital loan proceeds to be 

used to pay any type of business debt, 

including loans owned by a Federal 

agency (including SBA) or an SBIC. SBA 

also is revising the regulation to clarify 

that COVID EIDL loan proceeds may be 

used to make debt payments including 

monthly payments, payments of 

deferred interest, and pre-payments, 

except that pre-payments will not be 

permitted on debt that is owned by a 

Federal agency (including SBA) or an 

SBIC. 

5. Limits of COVID EIDL Loans to a 

Single Corporate Group 

SBA is adding a new regulation to 

state that entities that are part of a single 

corporate group shall in no event 

receive more than $10,000,000 of 

COVID EIDL loans in the aggregate. For 

purposes of this limit, entities are part 

of a single corporate group if they are 

majority owned, directly or indirectly, 

by a common parent. Businesses are 

subject to this limitation even if the 

businesses are in certain hard-hit sectors 

and able to use the per-physical location 

application of the size standard as set 

forth in 13 CFR 123.300(e)(5). 

Given the changes in the COVID EIDL 

maximum loan amount, eligibility, and 

increased outreach to industries that 

have been particularly hard hit by the 

pandemic (for example, restaurants, 

hotels, gyms, travel and tourism), SBA 

expects an increase in the number of 

applications submitted and average loan 

size. The Administrator determined that 

limiting the amount of COVID EIDL 

loans that a single corporate group may 

receive will promote the availability of 

COVID EIDL loans to the largest 

possible number of borrowers. The 

Administrator has concluded that a 

limitation of $10,000,000 strikes an 

appropriate balance between broad 

availability of COVID EIDL loans and 

program resource constraints. SBA’s 

affiliation rules, which relate to an 

applicant’s eligibility for COVID EIDL 

loans, continue to apply independent of 

this limitation. 

6. Additional Information 

SBA may provide further information 

through guidance that will be posted on 

SBA’s website at www.sba.gov, if 

needed. Questions may be directed to an 

SBA Disaster Customer Service 

Representative at 1–800–659–2955 

(individuals who are deaf or hard of 

hearing may call 1–800–877–8339), or a 

local SBA Field Office; the list of local 

SBA Field Offices may be found at 

https://www.sba.gov/tools/localassistance/districtoffices. 

Compliance With Executive Orders, the 

Congressional Review Act, Paperwork 

Reduction Act, and the Regulatory 

Flexibility Act 

Executive Orders 12866 and 13563 

OMB’s Office of Information and 

Regulatory Affairs (OIRA) has 

determined that this interim final rule is 

economically significant for the 

purposes of Executive Orders 12866 and 

13563. SBA, however, is proceeding 

under the emergency provision at 

Executive Order 12866 section 

6(a)(3)(D), based on the need to move 

expeditiously to mitigate the current 

economic hardships and conditions 

arising from the COVID–19 emergency. 

This rule is necessary to provide 

economic relief to small businesses and 

private nonprofit organizations 

nationwide adversely impacted by 

COVID–19. As evidence of unmet need, 

the Restaurant Revitalization Fund 

(RRF) received $28.6 billion in 

appropriations and in 21 days, received 

278,304 RRF applications totaling more 

than $72 billion, which resulted in 

177,300 businesses without assistance. 

Further, with the end of the Paycheck 

Protection Program (PPP), businesses 


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and nonprofit organizations that are still 

struggling will turn to the COVID EIDL 

program for long-term recovery. For 

these reasons, SBA anticipates that this 

rule will result in substantial benefits to 

small businesses, nonprofit 

organizations, their employees, and the 

communities they serve. 

Executive Order 12988 

SBA has drafted this rule, to the 

extent practicable, in accordance with 

the standards set forth in section 3(a) 

and 3(b)(2) of Executive Order 12988, to 

minimize litigation, eliminate 

ambiguity, and reduce burden. The rule 

has no preemptive or retroactive effect. 

Executive Order 13132 

SBA has determined that this rule 

will not have substantial direct effects 

on the States, on the relationship 

between the National Government and 

the States, or on the distribution of 

power and responsibilities among the 

various layers of government. Therefore, 

SBA has determined that this rule has 

no federalism implications warranting 

preparation of a federalism assessment. 

Congressional Review Act 

OIRA has determined that this is a 

major rule for purposes of subtitle E of 

the Small Business Regulatory 

Enforcement and Fairness Act of 1996 

(also known as the Congressional 

Review Act or CRA), 5 U.S.C. 804(2) et 

seq. Under the CRA, a major rule takes 

effect 60 days after the rule is published 

in the Federal Register. 5 U.S.C. 

801(a)(3). 

Notwithstanding this requirement, the 

CRA allows agencies to dispense with 

the requirements of section 801 when 

the agency for good cause finds that 

such procedure would be 

‘‘impracticable, unnecessary, or contrary 

to the public interest,’’ and provides 

that the rule shall take effect at such 

time as the Federal agency promulgating 

the rule determines. 5 U.S.C. 808(2). 

Pursuant to section 808(2), SBA for good 

cause finds that a 60-day delay to 

provide public notice would be 

impracticable, unnecessary, and 

contrary to the public interest. Likewise, 

for the same reasons, SBA for good 

cause finds that there are grounds to 

waive the 30-day effective date delay 

under the Administrative Procedure 

Act. 5 U.S.C. 553(d)(3). 

Other SBA COVID–19 relief programs 

have recently ended or exhausted the 

funding provided for the program 

(including PPP and RRF), yet businesses 

and nonprofit organizations are still in 

need of support. The COVID EIDL 

program is more critical now than it was 

before because of the lack of these other 

resources and the continuing economic 

instability. An immediate effective date 

will give small businesses, nonprofit 

organizations, qualified agricultural 

businesses, and independent contractors 

affected by this interim final rule the 

maximum amount of time to apply for 

loans and SBA the maximum amount of 

time to process applications before the 

program ends on December 31, 2021. 

Given the short duration of this 

program, SBA has determined that it is 

impractical and not in the public 

interest to provide a delayed effective 

date. 

Paperwork Reduction Act, 44 U.S.C. 

Chapter 35 

SBA has determined that this rule 

will require revisions to the COVID–19 

Economic Injury Disaster Loan 

Application information collection 

(OMB Control Number 3245–0406). The 

application form will be revised to 

require the disclosure of the NAICS 

code for the applicant in order to 

determine the size of the applicant on 

a per-physical location basis and to add 

an option to identify the eligible entity 

as a business that is assigned a NAICS 

code beginning with 61, 71, 72, 213, 

3121, 315, 448, 451, 481, 485, 487, 511, 

512, 515, 532, or 812, employs not more 

than 500 employees per physical 

location, and together with affiliates has 

no more than 20 locations. In addition, 

to simplify and streamline the process 

for applicants, SBA has consolidated 

Forms 3501 (COVID–19 Economic 

Injury Disaster Loan Application), 3502 

(Economic Injury Disaster Loan 

Supporting Information), and 3503 

(Self-Certification for Verification of 

Eligible Entity for Economic Injury 

Disaster Loan) into one form. This will 

reduce the burden on applicants as they 

will only need to enter certain 

information once. SBA also added 

questions related to entity type and 

types of business activity to assist 

borrowers in making the eligibility 

certification. Further, SBA revised the 

questions related to the calculation of 

economic injury for clarity and to aid in 

automating the review process. Finally, 

SBA made additional technical edits to 

the form for clarity. SBA has obtained 

emergency approval of the revisions, 

including waiver of public comment 

notices. The collection is approved for 

use until February 28, 2022. SBA will 

take the necessary steps to solicit 

comments and revise the information 

collection, if necessary, before approval 

expires. 

Regulatory Flexibility Act (RFA) 

The Regulatory Flexibility Act (RFA), 

5 U.S.C. 601–612, generally requires 

that when an agency issues a proposed 

rule, or a final rule pursuant to section 

553(b) of the Administrative Procedure 

Act or another law, the agency must 

prepare a regulatory flexibility analysis 

that meets the requirements of the RFA 

and publish such analysis in the 

Federal Register. 5 U.S.C. 603, 604. 

Rules that are exempt from notice and 

comment are also exempt from the RFA 

requirements, including conducting a 

regulatory flexibility analysis, such as 

when, among other exceptions, the 

agency for good cause finds that notice 

and public procedure are impracticable, 

unnecessary, or contrary to the public 

interest. SBA Office of Advocacy Guide: 

How To Comply with the Regulatory 

Flexibility Act, Ch.1. p.9. Since this rule 

is exempt from notice and comment, 

SBA is not required to conduct a 

regulatory flexibility analysis. 

List of Subjects 

13 CFR Part 121 

Loan programs—business, Reporting 

and recordkeeping requirements, Small 

business. 

13 CFR Part 123 

Loan Program—disaster loan program. 

For the reasons stated in the 

preamble, SBA amends 13 CFR parts 

121 and 123 as follows: 

PART 121—SMALL BUSINESS SIZE 

REGULATIONS 

■ 1. The authority citation for 13 CFR 

part 121 continues to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 

636(a)(36), 662, and 694a(9); Pub. L. 116–136, 

Section 1114. 

■ 2. Amend § 121.301 by adding 

paragraph (g) to read as follows: 

§ 121.301 What size standards and 

affiliation principles are applicable to 

financial assistance programs? 

* * * * * 

(g) For COVID–19 Economic Injury 

Disaster (COVID EIDL) loans, an 

‘‘affiliated business’’ or ‘‘affiliate’’ is a 

business in which an eligible entity has 

an equity interest or right to profit 

distributions of not less than 50 percent, 

or in which an eligible entity has the 

contractual authority to control the 

direction of the business, provided that 

such affiliation shall be determined as 

of any arrangements or agreements in 

existence as of January 31, 2020. For 

exceptions to affiliation, see 

§ 121.103(b). 


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Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Rules and Regulations 50219 

PART 123—DISASTER LOAN 

PROGRAM 

■ 3. The authority citation for 13 CFR 

part 123 is revised to read as follows: 

Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 

636(d), and 657n; Section 1110, Pub. L. 116– 

136, 134 Stat. 281; and Section 331, Pub. L. 

116–260, 134 Stat. 1182. 

■ 4. Amend § 123.13 by revising the first 

sentence of paragraph (e) and paragraph 

(f) to read as follows: 

§ 123.13 What happens if my loan 

application is denied? 

* * * * * 

(e) If SBA declines your application a 

second time, you have the right to 

appeal in writing to the Director, 

Disaster Assistance Processing and 

Disbursement Center (DAPDC) or the 

Director’s designee(s). * * * 

(f) The decision of the Director, 

DAPDC or the Director’s designee(s), is 

final unless: 

(1) The Director, DAPDC or the 

Director’s designee(s), does not have the 

authority to approve the requested loan; 

(2) The Director, DAPDC or the 

Director’s designee(s), refers the matter 

to the SBA Associate Administrator for 

Disaster Assistance (AA/DA); 

(3) The AA/DA, upon a showing of 

special circumstances, requests that the 

Director, DAPDC or the Director’s 

designee(s), forward the matter to him 

or her for final consideration; or 

(4) The SBA Administrator, solely 

within the Administrator’s discretion, 

chooses to review the matter and make 

the final decision. Such discretionary 

authority of the Administrator does not 

create additional rights of appeal on the 

part of an applicant not otherwise 

specified in SBA regulations. 

* * * * * 

■ 5. Amend § 123.300 by adding 

paragraph (e) to read as follows: 

§ 123.300 Is my business eligible to apply 

for an economic injury disaster loan? 

* * * * * 

(e) COVID–19 Economic Injury 

Disaster (COVID EIDL) loans are 

available if, as of the date of application, 

you: 

(1) Are a business, including an 

agricultural cooperative, aquaculture 

enterprise, nursery, or producer 

cooperative (but excluding all other 

agricultural enterprises), that is small 

under SBA Size Standards (as defined 

in part 121 of this chapter); 

(2) Are an individual who operates 

under a sole proprietorship, with or 

without employees, or as an 

independent contractor; 

(3) Are a private non-profit 

organization that is a non-governmental 

agency or entity that currently has an 

effective ruling letter from the Internal 

Revenue Service (IRS) granting tax 

exemption under sections 501(c), (d), or 

(e) of the Internal Revenue Code of 

1954, or satisfactory evidence from the 

State that the non-revenue-producing 

organization or entity is a non-profit one 

organized or doing business under State 

law, or a faith-based organization; 

(4) Are a business, cooperative, 

agricultural enterprise, Employee Stock 

Ownership Plan (as defined in 15 U.S.C. 

632), or tribal small business concern 

(as described in 15 U.S.C. 657a(b)(2)(C)), 

with not more than 500 employees; or 

(5) Are a business that is assigned a 

North American Industry Classification 

System (NAICS) code beginning with 

61, 71, 72, 213, 3121, 315, 448, 451, 481, 

485, 487, 511, 512, 515, 532, or 812, 

employs not more than 500 employees 

per physical location, and together with 

affiliates has no more than 20 locations. 

■ 6. Amend § 123.303 by adding a 

sentence to the end of paragraph (a) and 

revising paragraph (b)(2) to read as 

follows: 

§ 123.303 How can my business spend my 

economic injury disaster loan? 

(a) * * * COVID EIDL loan proceeds 

also may be used to make debt 

payments including monthly payments, 

payment of deferred interest, and prepayments on any business debts, except 

pre-payments are not permitted on any 

loans owned by a Federal agency 

(including SBA) or a Small Business 

Investment Company licensed under the 

Small Business Investment Act. 

(b) * * * 

(2) Except for COVID EIDL loan 

proceeds, make payments on loans 

owned by a Federal agency (including 

SBA) or a Small Business Investment 

Company licensed under the Small 

Business Investment Act; 

* * * * * 

■ 7. Add § 123.304 to read as follows: 

§ 123.304 Is there a limit on the maximum 

loan amount to a single corporate group for 

COVID EIDL Loans? 

Entities that are part of a single 

corporate group shall in no event 

receive more than $10,000,000 of 

COVID EIDL loans in the aggregate. For 

purposes of this limit, entities are part 

of a single corporate group if they are 

majority owned, directly or indirectly, 

by a common parent. 

Isabella Casillas Guzman, 

Administrator. 

[FR Doc. 2021–19232 Filed 9–7–21; 8:45 am] 

BILLING CODE 8026–03–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0463; Project 

Identifier 2018–SW–050–AD; Amendment 

39–21698; AD 2021–17–15] 

RIN 2120–AA64 

Airworthiness Directives; Leonardo 

S.p.a. Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting a new 

airworthiness directive (AD) for 

Leonardo S.p.a. Model AB139 and 

AW139 helicopters with certain main 

rotor blades installed. This AD was 

prompted by a report of an in-flight loss 

of a main rotor blade (MRB) tip cap. 

This AD requires inspecting the MRB 

tip cap for disbonding. The FAA is 

issuing this AD to address the unsafe 

condition on these products. 

DATES: This AD is effective October 13, 

2021. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain document listed in this AD 

as of October 13, 2021. 

ADDRESSES: For service information 

identified in this final rule, contact 

Leonardo S.p.A. Helicopters, Emanuele 

Bufano, Head of Airworthiness, Viale 

G.Agusta 520, 21017 C.Costa di 

Samarate (Va) Italy; telephone +39– 

0331–225074; fax +39–0331–229046; or 

at https://

customerportal.leonardocompany.com/ 

en-US/. You may view the referenced 

service information at the FAA, Office 

of the Regional Counsel, Southwest 

Region, 10101 Hillwood Pkwy., Room 

6N–321, Fort Worth, TX 76177. For 

information on the availability of this 

material at the FAA, call (817) 222– 

5110. It is also available at https://

www.regulations.gov by searching for 

and locating Docket No. FAA–2021– 

0463. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–0463; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

final rule, the European Aviation Safety 

Agency (now European Union Aviation 

Safety Agency) (EASA) AD, any 

comments received, and other 

information. The street address for 


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