May 14 PPP Certification Requirements Update: Deadline to Return Funds Extended to May 18, 2020
The Paycheck Protection Program (PPP) certification requirements have been front and center in the minds of potential borrowers. To recap, SBA FAQ #31 augments the existing borrower good faith certification that is required as part of the application process. While borrowers still must certify that “current economic conditions make necessary the loan request to support the ongoing operations,” the additional certification requirements referenced below were impacted by the May 13, 2020 release of SBA FAQ #46.
Prior to the issuance of FAQ #46, all new and existing applicants, as well as borrowers who have already received PPP funding, were obligated to “take current business activity into account” when determining if PPP funding is needed. Furthermore, all borrowers were required to analyze their “ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business”.
The recent release of FAQ #46 brought welcomed guidance surrounding how borrowers could satisfy this certification standard, as well as provide a demarcation line for SBA review of loans with principal amounts above and below the $2 million threshold. We point you to our recent e-blast, “New FAQ Released on Review of PPP Certification” for additional information on the certification thresholds and requirements.
For borrowers who are still considering returning the funds, the timeline has again been extended. Prior SBA FAQs had extended the deadline to return the funds from the original date of May 7, 2020 to May 14, 2020. On May 13, 2020, the SBA further extended the deadline for impacted borrowers to return the funds from May 14, 2020 to May 18, 2020 via the release of FAQ #47. FAQ #47 further indicates that the deadline extension is automatic – there is no requirement for borrowers to separately apply as they consider the ramifications of FAQ #46.
Please see our e-blast entitled “Additional PPP Certification Requirements” for ideas and tips on how to document your good faith certification position for impacted borrowers.
Sax will continue to update you as further details are made available. Reach out to your Sax advisor or email [email protected] with questions. For more and on-going information relative to your state and business, visit Sax’s COVID-19 Resource Center.