SBA Clarifies “Good Faith Certification” for PPP Loan Forgiveness
Filed under:Affordable Housing, Construction, COVID Updates, Dental, Family Business, FQHC, Healthcare, Nonprofit, Private Companies, Small Business Services
In order to receive a Paycheck Protection Program (PPP) loan, borrowers must generally certify that current economic uncertainty renders such a loan necessary to support ongoing operations.
The Small Business Administration (SBA) updated the PPP FAQs to indicate that private companies with “adequate sources of liquidity” should review and take into account their current business activity and ability to access other sources of liquidity before certifying their need for PPP loans.
It also noted that if a private company had received funds prior to the issuance of the guidance requiring review of liquidity, it could repay the loan in full by May 14, 2020 and be deemed to have complied with the relevant certification rules.
On May 13, 2020 the SBA updated its PPP FAQs again and extended this safe harbor period to May 18, 2020 in FAQ #47 to give borrowers an opportunity to review and consider FAQ #46 regarding a safe harbor provision for PPP loans with an original principal amount of less than $2 million.