This article was updated on May 14, 2020.  Updates to this article will be made as new information becomes available

MAY 14, 2020 UPDATE - Important Update on the Paycheck Protection Program under the CARES Act

Since early April, the U.S. Small Business Administration (“SBA”) has published Frequently Asked Questions (“FAQs”) in regards to the implementation of Section 1102 – Paycheck Protection Program (“PPP”) and Section 1106 – Loan Forgiveness under the CARES Act.  The following summarizes the key questions addressed since Schneider Downs’ last article on  May 7, 2020 regarding the PPP FAQs.

Q: 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 of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.  Additionally, 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.  

The SBA will review all PPP loans in excess of $2 million, and other PPP loans as appropriate. If the SBA determines that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan, it will ask the borrower to repay 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 the SBA, the SBA will not pursue administrative enforcement.

Q: An SBA interim final rule posted on May 8, 2020 provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification concerning the necessity of the loan request in good faith. Is it possible for a borrower to obtain an extension of the May 14, 2020 repayment date?

Yes, the SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider the above FAQ.  Borrowers do not need to apply for this extension.

If you need more information, please reach out to any of your contacts at Schneider Downs or contact Joel Rosenthal (jrosenthal@schneiderdowns.com) directly.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Reshoring and Manufacturers
Third Party Risk Management Planning During COVID-19
Reflections from the Recent Employee Benefit Plan Season
CARES Act Funding to Help Ohioans Impacted by COVID-19
Using External Data and Process Automation to Enhance Analysis
The Impact of COVID-19 on Community Colleges

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222

p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215

p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102