SBA Releases Guidance on Borrowers’ Good Faith Certification
The SBA released an update to its frequently asked questions on May 13, 2020, addressing borrowers’ required good-faith certification concerning the necessity of their PPP loan request.
Generally, any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. For purposes of this safe harbor, a borrower must include its affiliates to the extent required under the Interim Final Rules on affiliates previously issued on April 15, 2020.
All PPP loans in excess of $2 million will be subject to review by the SBA for compliance with program requirements set forth in the PPP Interim Final Rules and the Borrower Application Form. If the SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, the SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness.
If you have any questions concerning the application of this update, please contact a member of the Marcum SBA Task Force or email firstname.lastname@example.org
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