The Small Business Administration (SBA) has continued to provide additional guidance regarding the Paycheck Protection Program (PPP) in the form of Frequently Asked Questions (FAQs) posted to its website.
FAQ #31 issued on April 23rd provides guidance on what it means to certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The FAQ states in part, “Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.” Further, “Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?”
Answer: SBA is extending the repayment date for this safe harbor to May 14, 2020. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor. SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.
FAQ #37 issued on April 28th also references the FAQ #31 guidance in response to the question, “Do businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?”
In addition, FAQ #39 published on April 29th provides, “To further ensure PPP loans are limited to eligible borrowers in need, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.”
We encourage all recipients of PPP funds to access the link and read the full text of the FAQs referenced above, as well as the certifications contained in your original PPP Borrower Application Form, and to contact your banker if you have questions or to discuss your specific situation.
For more information about the PPP program, please visit our COVID-19 Updates & Resources page. As always, don’t hesitate to reach out to the ML&R team with any questions.
