On May 5, 2020, the Small Business Administration (SBA) extended the safe harbor deadline for returning Paycheck Protection Program (PPP) funds.
The SBA has been issuing incremental PPP guidance in the form of answers to frequently asked questions. On April 23, 2020, in its FAQ #31, SBA established a May 7, 2020 deadline for borrowers to return PPP loan proceeds if, based on SBA guidance, they deemed it necessary to do so.
On May 5, 2020 in its FAQ #43, SBA extended this deadline to May 14, 2020, affording borrowers additional time to digest the evolving PPP guidance:
43. Question: FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?
Answer: SBA is extending the repayment date for this safe harbor to May 14, 2020. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor. SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.
FAQ #43 also indicates that guidance on SBA’s review of borrower good faith certifications is forthcoming. For additional guidance on PPP, visit our COVID-19 Resources Hub or contact our COVID-19 Advisory Services Team at 301.231.6200.