The Treasury Department has recently published the Paycheck Protection Program Loans Frequently Asked Questions (PPP FAQs). The Treasury Department’s publication provides businesses and lenders desperate guidance related to the Paycheck Protection Program (PPP) and the applicable rules, regulations and guidelines that have been plaguing PPP loan participants.
This alert summarizes a number of the key questions in the PPP FAQs as of April 7, 2020. Each question number referenced corresponds to the question number in the PPP FAQs. These answers may be amended and more guidance may be published. Buchalter remains dedicated to staying informed on these issues.
- Question 1: Lender’s Reliance on Borrower’s Payroll Cost Calculation
- It is the borrower’s responsibility to make an accurate calculation of payroll costs.
- Lenders are expected to make a good faith review, i.e., minimal review of calculations based on a payroll report by a recognized third-party payroll processor is reasonable.
- Lenders are allowed to rely on borrower representation.
- Lender should work with borrower to remedy calculation error or material lack of substantiation.