The SBA, in consultation with the Department of the Treasury, on May 13, 2020, issued additional guidance for the Paycheck Protection Program (PPP) in the form of Frequently Asked Questions. The guidance relates to the Good Faith Certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
- FAQ #46 provides a safe harbor for the Good Faith Certification. 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. We believe this means that the vast majority of borrowers will have no concern over the question of the good faith certification and will not need to decide on whether to return the PPP money by the extended deadline.
- FAQ #47 extends a separate safe harbor extension relating to the Good Faith Certification mentioned above. An SBA interim final rule posted on May 8, 2020, provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020, will be deemed by the SBA to have made the required certification in good faith. That repayment date has been extended to May 18, 2020.