The Small Business Administration (SBA) issued an interim final rule to extend the limited safe harbor with respect to certification concerning need for a Paycheck Protection Program loan request from May 14, 2020 to May 18, 2020.
PPP applicants are required to certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” A borrower that repays a PPP loan in full by May 18, 2020 will be deemed by SBA to have made the required certification concerning need for the loan request in good faith.
In addition, the interim final rule extends the deadline for lenders to submit the SBA Form 1502 (which collects payment and loan information) from May 22, 2020 to May 29, 2020. The extension corresponds with the extension to the safe harbor deadline for repaying PPP loans.
These interim final rules will take effect on May 26, 2020 (i.e., the scheduled date of publication in the Federal Register). Comments are due 30 days after publication (i.e., on or around June 25, 2020).
Below are previously issued interim final rules on PPP and upcoming comment deadlines:
- 85 FR 20811 provides formal guidance on implementation for borrowers and lenders regarding eligibility, use of PPP loans, loan forgiveness, and other terms and conditions. Comments were due May 15, 2020 (WHG summary).
- 85 FR 20817 provides additional guidance on how affiliates will be considered together for the purposes of determining eligibility. See SBA’s fact sheet on four tests for affiliation. Comments were due May 15, 2020.
- 85 FR 21747 provides additional guidance regarding eligibility for individuals with self-employment income and certain businesses. Comments were due May 20, 2020 (WHG summary).
- 85 FR 23450 provides additional guidance regarding promissory notes, authorizations, affiliation, and eligibility. Comments are due May 28, 2020 (WHG summary).
- 85 FR 23917 authorizes eligible lenders to use alternative criteria to calculate the maximum loan amount for PPP loans. Comments are due May 30, 2020 (WHG summary).
- 85 FR 26321 clarifies that a lender must fully disburse a PPP loan within 10 calendar days of loan approval. Comments are due June 3, 2020 (WHG summary).
- 85 FR 26324 provides guidance amount of PPP loans that any single corporate group may receive and criteria for non-bank lender participation in the PPP. Comments are due June 3, 2020 (WHG summary).
- 85 FR 27287 provides additional guidance on nondiscrimination obligations and additional eligibility requirements for higher education institutions. Comments are due June 8, 2020 (WHG summary).
- 85 FR 29842 provides additional guidance clarifying that PPP loans may be increased for approved partnerships and seasonal employers based on revised calculations. Comments are due June 18, 2020 (WHG summary).
- 85 FR 29845 extends the deadline for lenders to submit the SBA Form 1502 (which collects payment and loan information) from May 18, 2020 to May 22, 2020. Note: The interim final rule released today extends the deadline to May 29, 2020. Comments are due June 18, 2020 (WHG summary).
- 85 FR 29847 states electric cooperatives that are exempt from Federal income taxation will be eligible for a PPP loan. Comments are due June 18, 2020 (WHG summary).
Lastly, Frequently Asked Questions for lenders and borrowers (last updated May 19, 2020) are available here.