The SBA and Treasury Department announced today, May 13, 2020, the following as it pertains to safe-harbor certification:
- Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?
SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue:
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.
SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.
The full list of Paycheck Protection Program Loans Frequently Asked Questions from the Treasury Department can be found here.
Please reach out to us with any questions you may have regarding certification.