On April 28, 2020, the U.S. Small Business Administration published an interim final rule. This interim final rule applies to applications submitted under the Paycheck Protection Program (“PPP”) through June 30, 2020, or until funds made available for this purpose are exhausted.
As noted in the interim final rule, the SBA provided a limited safe harbor for businesses who may no longer believe that they have made their certification on their Borrower Application Form (SBA Form 2483) in good faith in light of more recent guidance that the SBA has released in recent days. The interim final rule provided borrowers who applied for a PPP loan prior to April 24, 2020, until May 7, 2020 to repay their loan in full without the SBA questioning whether the borrower made their certification in good faith.
On May 5, 2020, the SBA, in consultation with the Department of the Treasury, updated its Frequently Asked Questions on the Paycheck Protection Program Loans. Question and Answer 43 extended the safe harbor from May 7, 2020 until May 14, 2020 and noted that the SBA intends on providing additional guidance on how it will review (and presumably interpret) the certification prior to May 14, 2020.
Investment advisers who applied for a PPP loan prior to April 24, 2020 (and perhaps those who have applied after that period) should reconsider their timeline for making a decision and keep informed on updated guidance.
Do not hesitate contacting me if you would like to discuss the interim final rule, the extension of the safe harbor, any SBA guidance, or disclosure issues.