Small Business Administration Extends "Safe Harbor" Deadline to Return Paycheck Protection Program Funds to May 14th
Last updated May 7, 2020
On May 5, 2020, the Small Business Administration (the “SBA”), through its Frequently Asked Questions (“FAQ”), extended the safe harbor for borrowers to return Paycheck Protection Program (the “PPP”) funds from May 7, 2020 to May 14, 2020. The FAQs can be found here.
As part of a PPP loan application, the applicant must make a good faith certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” In FAQ #31, published on April 23, 2020, the SBA advised applicants to review this certification carefully “taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.” The SBA stated that applicants that applied for a PPP loan prior to the issuance of the guidance, and repaid the loan by May 7, 2020, would be deemed to have made the certification in good faith. Applicants now have until May 14, 2020 to return the funds and take advantage of the safe harbor.
The SBA will audit all PPP loans in excess of $2 million, and other loans as appropriate. Guidance from the SBA on the audit procedure will be forthcoming. The SBA also intends to issue guidance on how it will review certifications prior to the May 14th safe harbor date. CSG will continue to track guidance on this and other PPP issues and will provide updates. If you have any questions regarding the PPP, please reach out to your CSG attorney.
For additional information pertaining to the coronavirus outbreak, please visit CSG's COVID-19 Resource Center.
This publication contains general information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Attorney Advertising. Prior results do not guarantee a similar outcome.