On May 5, 2020, the Small Business Administration (“SBA”) updated its Frequently Asked Questions (“FAQs”) regarding implementation of the Paycheck Protection Program (“PPP”), to specifically address a one-week extension of the repayment date for purposes of the safe harbor set forth in prior SBA guidance.
As we have discussed in previous alerts, in submitting a PPP application, borrowers must carefully review and certify in good faith that, among other things, “[c]urrent economic uncertainty makes [the] loan request necessary to support the ongoing operations of the Applicant.” Pursuant to the updated FAQs, borrowers who applied for a PPP loan prior to April 24, 2020 and who repay such loan in full by May 14, 2020 (extended from May 7, 2020), will be deemed by the SBA to have made the foregoing certification in good faith.
Per the FAQs, the SBA intends to issue additional guidance regarding the required certification by May 14, 2020.
We are continuing to monitor as additional rules, interpretations and guidance are released by the SBA in connection with the PPP. Our attorneys are available to answer any questions with respect to the PPP, including the safe harbor and required certification detailed above, as well as other aspects of the program and related state and federal relief measures.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.