The full text of the FAQs can be found here.
As the PPP was launched, the application form provided by the SBA and participating lenders required the applicant to certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations” of the applicant. On April 23, 2020, the SBA issued FAQ #31, which indicated that borrowers must make the required certification in good faith, taking into account their current business activity and “their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.” In conjunction with the issuance of FAQ #31, the SBA announced that any borrower who returned PPP funds prior to May 7, 2020 would be presumed to have made the required certification in good faith. The safe harbor date was later extended to May 14 and the SBA promised additional guidance prior to that date.
The SBA has now issued FAQ #46, which provides much-needed clarity around the SBA’s view of the required certifications. In FAQ #46, the SBA has announced that:
The SBA Focus Group of the COVID-19 Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the PPP loan program is implemented.
Co-author Matthew McDonald is a partner in the Corporate & Securities Department. Co-author Mark Sheppard is a partner in the White-Collar Defense & Government Investigations practice group.