The U.S. Small Business Administration (SBA), in consultation with the U.S. Department of the Treasury, has extended the deadline to repay Paycheck Protection Program (PPP) loans by one week.
In further response to the SBA's recent guidance in FAQ 31 reminding borrowers to review carefully the certification required for PPP loans that "[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant" and providing a safe harbor to repay any PPP loan by May 7, 2020, so as to avoid any contention that such certification was not in fact made in good faith, the SBA released FAQ 43 on May 5, 2020.
In FAQ 43, the SBA advises that:
- SBA is extending the repayment date for the safe harbor to May 14, 2020.
- Borrowers do not need to apply for this extension.
- The 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.
Next Steps
Borrowers of PPP loans should consider carefully both the new deadline and the expected additional guidance on how the SBA will review certifications, if feasible, before submitting an application or deciding whether to retain borrowed PPP funds.
For a discussion of various factors that borrowers could consider when making this determination, see Holland and Knight's previous alert ("Key Factors for Companies to Consider When Certifying Their PPP Need," April 25, 2020).
