SBA Updates PPP GuidanceMay 6th, 2020 by Editor
The Small Business Administration (SBA) issued updated guidance regarding the Paycheck Protection Program (PPP) late yesterday. The new guidance specifically addresses what has become known as the “safe harbor date,” or the day a company has to voluntarily terminate or repay its PPP loan funds. Initially set for May 7, the Safe Harbor Date has been pushed back a week, to May 14, to allow that the government will consider a business’s “ability to access other sources of liquidity.”
The National Lumber & Building Material Dealers Association (NLBMDA) felt the criteria against which companies would be judged for repayment was not clearly defined and lobbied the SBA and the Department of the Treasury to move the safe harbor date while calling for new guidance.
In a press released issued on the heels of yesterday’s announcement, the NLBMDA issued the statement that, “We are pleased to report that SBA’s updated guidance granted both requests.”
The announcement came with specifically relevant information in a question about FAQ #31, which “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.”
The NLBMDA attributes the successful lobbying to the grassroots efforts of its members and expects to communicate more information as soon as the additional guidance mentioned in SBA’s response is released.