SBA Releases Additional PPP Guidance
On May 13, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP).
Please note the following FAQs:
- Question 46 establishes a safe harbor for borrowers certifying in good faith on the PPP application that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The safe harbor amount is for all PPP loans with an original principal amount of less than $2 million. These applicants will be deemed to have made the required certification concerning the necessity of the loan request in good faith. Borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. The SBA has stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by the SBA for compliance with program requirements.
- Question 47 extends the time that applicants have to repay PPP loans from May 14 to May 18. This is for applicants who have applied and received PPP funds based on a misunderstanding or misapplication of the required certifications. Applicants who return the funds by May 18 will be deemed by the SBA to have made the required certification concerning the necessity of the loan request in good faith.
- See all FAQs here.
The SBA also released an interim final rule on loan increases for partnerships and seasonal employers on May 13. The rule allows for these applicants, who have previously applied and been funded through their lender, to request additional funds up to the maximum loan amount as determined by the additional guidance released after the approval of their original loan amounts. The additional guidance for partnerships, posted on April 14, allowed partners to include their own self-employment income up to $100,000 as part of payroll costs on the PPP loan application filed by the partnership. On April 28, additional guidance was released for seasonal employers, allowing an alternate calculation for maximum loan amounts.