With the upcoming May 14th safe harbor deadline (extended from the original date of May 7th) to repay Paycheck Protection Program (PPP) loans, borrowers have been toiling with the documentation necessary to establish good faith representations on loan applications and the certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” On May 13th by way of FAQ, the SBA and the Treasury added clarification to PPP loan recipients receiving less than $2 million by stating these will be deemed to have made the economic necessity certification in good faith. Further, the SBA does not plan to focus limited audit resources on loans under $2 million.
Borrowers receiving greater than $2 million will be subject to review by the SBA for compliance with the good-faith certification. Upon review, if the SBA determines lack of adequate basis for the required certification concerning the necessity of the loan request, the SBA will seek repayment of the loan and will not enforce additional actions or referrals if repaid upon request.
Reach out to the team at MWB for any questions you may have on anything above or ANY impact you are seeing to your business during this time.