We are pleased to provide you an update regarding additional guidance issued by the U.S. Treasury regarding the Paycheck Protection Program (PPP). In their latest FAQ, the U.S. Treasury has provided the following question and answer related to the date by which borrowers must return PPP loan proceeds if they conclude that their organization no longer qualifies for a PPP loan (in order to be deemed to have made the original certification in good faith).

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.

Per our previous communication, we encourage PPP loan recipients to consider their certification and whether any changes have occurred that require consideration for returning the loan proceeds. Specifically, consider whether your circumstances fall within the spirit and intent of this economic relief program. If you did receive and decide to keep PPP funding, it is critical that you maintain complete and accurate documentation to support your eligibility for such funding, the specific use of these funds, as well as your qualifications for forgiveness under the terms of the program. Any business that received a PPP loan prior to the issuance of this new guidance and who now believes that they do NOT demonstrate the necessity for the loan can repay the loan in full by May 14, 2020. Any business that does so will be deemed by the SBA to have made the required good faith certification on their PPP loan application.

As a reminder, RS&F is able to assist clients to determine loan forgiveness. We have developed a model for this purpose that will both track eligible expenses as well as project loan forgiveness. Please contact your RS&F Client Advisor to obtain this schedule and for assistance with PPP loan forgiveness.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.