SBA, Treasury Department Issue Guidance To Calm PPP Loan Borrowers Concerns
On Wednesday, the SBA updated its Frequently Asked Questions (FAQs) in order to extend the repayment date for this safe harbor to May 18, 2020, “to give borrowers an opportunity to review and consider FAQ #46.”
According to SBA, borrowers do not need to apply for this extension, and the extension “will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.”
Notably, the SBA also updated FAQ #46, confirming that “[a]ny borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
According to the SBA, this “is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans.”
According to some estimates, about half of the approximately 400 PPP loans approved for publicly traded companies were for less than $2 million.