Yesterday, May 13th, the Small Business Administration (“SBA”) updated the Frequently Asked Questions for Lenders and Borrowers for the Paycheck Protection Program (“PPP”). Specifically #46, “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?“SBA and the US Treasury determined, “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million 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. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.”
Click here to read the Paycheck Protection Program FAQs in more detail.
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