May 13, 2020 PPP update for Small Businesses
As you know, we like to keep our clients and friends of the firm up to date on the latest new that impacts their businesses. Here’s the latest about the PPP:
The recent addition to the PPP rules of having to certify the necessity of the loan has a lot of businesses worried that they may not have enough need and they could be challenged by the SBA later. The SBA even discussed filing fraud charges! As of last night (May 13, 2020), business who received less than $2million dollars can rest easy. According to the latest frequently asked questions (FAQ #46), any business receiving (together with its affiliates) a loan of less than $2million “will be deemed to have made the required certification concerning the necessity of the loan request in good faith.” That doesn’t mean the SBA won’t review your loan and it doesn’t mean they will automatically agree with you, but it does mean that fraud charges would be off the table. The SBA has said (FAQ #39) that they will review all loans in excess of $2million and other loans as appropriate. They have promised to release guidance about that procedure in the future. For now, they’ve extended the safe harbor period to May 18, 2020 (FAQ #47) for repayment of a loan that you now feel doesn’t meet the necessity certification.