May 14, 2020 | Read Time: 1 Minute
In an update to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) FAQs, the SBA and Treasury have announced that borrowers with an original principal amount less than $2 million “will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
Released just ahead of the May 14 repayment deadline, the SBA indicated in FAQ #46 that this safe harbor was introduced because borrowers who requested less than $2 million were less likely to have access to alternative funding options. The access to other capital was the sticking point in FAQ #31, which requested businesses that could not certify in good faith their need for funds to repay them by May 14. Additionally, the repay date was extended to May 18 allowing business owners to assess their plan to use PPP loan funds.
Borrowers with a principal amount greater than $2 million can still meet the good faith certification. Still, the SBA continues to emphasize that they will be reviewing those larger loan applications for compliance with program requirements.
Contact us for assistance with your PPP loan obligations.
Contact your local Huberty office if you need a plan to address this new action, or if you have not reset your strategic plan for 2020.