On May 13, 2020, the SBA released additional FAQs regarding how it will review borrowers’ good faith certifications for PPP loan requests.
In FAQ #46, the SBA stated “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.” The FAQ also addressed the good faith certification for PPP loan recipients with a principal amount greater than $2 million.
The SBA clarified that “borrowers with loans greater than $2 million may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance.” The SBA noted that it will review these applications to determine if the good-faith certification was met and if not, 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.” However, if the borrower repays the loan after this determination, the SBA “will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.”
For more information about the PPP program, please visit our COVID-19 Updates & Resources page. As always, don’t hesitate to reach out to the ML&R team with any questions.