The Paycheck Protection Program Loans Frequently Asked Questions (FAQs) (updated May 5, 2020) to include FAQ #43 which states that the SBA is extending the repayment date for PPP loans to May 14, 2020, for “good faith” or safe harbor certification by the SBA.
Question #43 was added May 5, 2020:
“FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty takes 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?”
The answer to FAQ #43 states the following: “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.”
Detail on FAQ 31 and additional Treasury guidance can be found here.
Given the revised guidance issued by the SBA and the pending May 14, 2020 deadline for returning loan proceeds, we strongly encourage you, your organization’s management, and board of directors to review your company’s financial situation. Specifically, consider whether your circumstances fall within the spirit and intent of this economic relief program. If you do receive and keep PPP funding, it is critical that you maintain complete and accurate documentation to support your eligibility for such funding, the specific use of these funds, as well as your qualifications for forgiveness under the terms of the program. This documentation will be crucial were your business to be audited and/or investigated.
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