Treasury/ SBA Issue New Guidance
On May 13, at the sustained urging of AGC, the U.S. Department of the Treasury and U.S. Small Business Administration issued guidance to address their threats of auditing PPP loan borrowers for a failure to show good faith need for their loans. The new guidance provides a critical safe harbor provision for firms that self-certified their need for Paycheck Protection Program (PPP) loans that totaled less than $2 million. In addition, the new guidance provides a mechanism to allow firms that: (a) received loans of $2 million or more; and (2) are later found to have not met the good faith need certification to repay, seemingly without penalty, those loans. While the new guidance is helpful, it does leave several important questions unanswered, including about the timing and condition of those possible loan repayments, as well as more detailed criteria the SBA will use to determine if a loan should be repaid. The agencies also extended the safe harbor repayment date from May 14 to May 18. AGC will continue to push Treasury officials to answer those questions as quickly as possible. See questions #46 and #47, found here, to read the complete guidance.
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