On May 13, 2020 the SBA, added a new Q&A announcing a safe harbor for PPP loans of less than $2 million. The following is the question and excerpts from the answer:
46. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?
“Any 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…
Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review…”
If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request…”
If you have any questions, please contact your Kerkering Barberio team member at (941) 365-4617 or visit our website at https://www.kbgrp.com/resources/covid-19-updates.