The Department of Treasury issued new guidance for borrowers about providing good-faith certification of their Payroll Protection Program (PPP) loan eligibility. The SBA and Treasury’s FAQ #46 explains how SBA will review the certifications.
SBA and Treasury determined that any borrower, together with its affiliates, that received PPP loans of less than $2 million will be deemed to have made the required certification in good faith. Recipients of loans less than $2 million do not need to return their loans because of concerns regarding their certification.
Borrowers with loans greater than $2 million will still have to provide an adequate basis for their certification. If SBA determines in the course of its review that a borrower lacked an adequate basis for the certification, SBA will seek repayment of the outstanding PPP loan balance and inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification, SBA will not pursue administrative enforcement. As a reminder, if you choose to repay the loan, the safe-harbor loan repayment date is Thursday, May 14.
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