clarification regarding loan certifications from the sba
On May 13, 2020, the Small Business Administration (SBA) issued new guidance to address the confusion created by its previous guidance which suggested that the recipients of Paycheck Protection Program (PPP) loans would need to revisit their applications to determine whether they would still be able to certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers who deemed themselves unable to make the certification in good faith had until May 14th to return the funds without consequence. That date has now been extended to Monday, May 18th.
The new guidance should provide comfort to the recipients of PPP loans of all sizes. According to the new guidance, any recipient of a loan less than $2 million will be deemed to have made the required certification regarding the necessity of the loan in good faith. Recipients of loans over $2 million are still likely to face increased scrutiny, but if the SBA determines that the borrower lacked an adequate basis for the required certification, it will notify the borrower. As long as the borrower repays the loan after receiving notice, the SBA will not pursue any further enforcement activities.
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guidance on ppp loan forgiveness
As many Paycheck Protection Program (PPP) loan borrowers approach the end of their eight-week “Covered Period” which began when they received their PPP loan proceeds, the Small Business Administration (SBA) has finally released its initial long-awaited guidance on loan forgiveness. On Friday, May 15th, the SBA issued a Loan Forgiveness Application which borrowers must submit to their lenders to apply for forgiveness of the loan. The Application includes a Loan Forgiveness Calculation Form, a schedule and worksheet to calculate eligible payroll costs, and an optional borrower demographic information form.
The instructions accompanying the Loan Forgiveness Application contain answers to some of the most pressing questions that borrowers and their advisors have had about the program. The following are some of the key issues addressed by the Application and instructions:
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A list of participating lenders and additional information can be found on www.sba.gov.
Click here to access the application for PPP
Click here to reference important details for borrowers about PPP.