The Small Business Administration (SBA) issued a second update to its answers to frequently asked questions about the Paycheck Protection Program (PPP) on May 13, 2020. This update extends the “safe harbor” period for businesses to return funds received under the PPP and be deemed by the SBA to have submitted their prior certification of necessity in good faith.
Question: 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 SBA to have made the required certification concerning the necessity of the loan request in good faith. Is it possible for a borrower to obtain an extension of the May 14, 2020 repayment date?
Answer: Yes, SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ #46. 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.
As we noted in a previous article, the SBA also updated its answers to frequently asked questions earlier in the day on May 13, 2020, to reflect new guidance concerning the so-called “economic uncertainty” certification.
Bradley will continue to monitor and report on the SBA’s evolving PPP guidance. If you have any questions about the PPP or related issues, please feel free to contact Aron Beezley, Frederic Smith, or Elizabeth Boone.