Dear Clients and Friends of the Firm:
As you may have heard, late yesterday the SBA added a new question and answer (#43) to their FAQ page addressing the
extension of the safe harbor deadline to return PPP Loan proceeds to May 14, 2020.
43. Question: FAQ #31 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.
We do not recommend a repayment decision be made until this additional guidance is published.
As discussed in our recent webinar, proper documentation is essential. We have a
checklist available where we have listed potential areas you should address with your documentation to support your decision to apply for and receive the PPP Loan funds. In addition, be certain to review your loan documents to be sure you are spending the PPP Loan proceeds in compliance with the loan documents’ provisions.
A recording of the webinar can be found by clicking
here.
Please reach out to your engagement shareholder with any unanswered questions you may have. If you are not a client of Levitzacks, please reach out to Victor Ramsauer, our President and CEO at
vramsauer@lz-cpa.com or 619.238.1077 extension 7024.
