Deadline to Return Loan Funds Extended to May 18, 2020
On May 8th, the SBA announced that any borrower who returned PPP loan funds by May 14, 2020 would be deemed to have made the required certification as to the necessity of the loan in good faith at the time of the loan request. This safe harbor was extended yesterday to May 18th, 2020 to allow borrowers to fully consider if they can adequately support their certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” as required by the program. This extension will be automatically implemented through an update to the SBA interim final rule.
More Funds Available for Partnerships and Seasonal Employers
In a rush to complete applications for the first round of funding, PPP loans may have been processed and funded for partnerships and seasonal employers before the SBA provided additional guidance on April 14 for partnerships, and April 28 for seasonal employers. Based on the additional guidance, some borrowers may have applied for additional funds. The SBA has authorized all PPP lenders to increase existing PPP loans to partnerships to cover partner compensation in accordance with the interim final rule posted on April 14, 2020, and to increase existing PPP loans to seasonal employers utilizing criteria published on April 28, 2020 to calculate the amount of the maximum loan request.
The SBA and the Department of the Treasury continue to publish guidance on their websites in the form of FAQ’s and the SBA regularly updates the interim final rule for changes to the PPP loan program. Check frequently with our website or someone at Mueller Prost for updates, or to help with any questions or concerns you may have about your PPP loan.