On May 5, 2020 the Small Business Administration (SBA) issued additional guidance extending the date to return PPP loan funds based upon a borrower’s re-evaluation of the loan certification from May 7, 2020 to May 14, 2020. This extension essentially gives borrower’s additional time to consider if their certification (i.e., “[c}urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”) was made in good faith.
Specifically the new guidance provides as follows:
- Question: FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 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.
For more information regarding PPP loans, please contact one of our attorneys at 941.748.0100 or email business and tax law attorney Jenifer Schembri at email@example.com.
View all of our COVID-19 perspectives here.