May 13, 2020
On May 13, 2020, the Small Business Administration (“SBA”) issued guidance regarding a borrower’s good-faith certification concerning the necessity of a Paycheck Protection Program (“PPP”) loan. All borrowers who, together with their affiliates, receive PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification in good faith. Moreover, if the SBA determines that a borrower who obtained more than $2 million dollars through a PPP loan lacked an adequate basis for the required certification, the SBA will not pursue administrative enforcement or referrals to other agencies based on the SBA’s determination with respect to the certification if the borrower repays the amount of the loan in full.
The full text of the SBA’s guidance is available here: https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020.pdf