Paycheck Protection Program
PPP Eligibility Requirement
May 5, 2020
Your Guide to the Latest PPP Eligibility Requirement
In our last update, we noted the importance of following updates to the program over the course of your loan, as these could affect the amount you owe. To better serve you during this time, we've provided a brief synopsis on the latest addition to the eligibility requirements below.
An updated FAQ document has been released by the Treasury and Small Business Administration, highlighting the required certification that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." This means all borrowers should be taking current business activity into account and ability to access other sources of liquidity sufficient to support ongoing operations.
As it appears that several companies with substantial market value and access to capital markets participated in the program, the SBA has provided a "safe harbor" for the return of PPP funds by May 14, 2020 for those that may be unlikely to demonstrate necessity in good faith.
For important details regarding the certification and new safe harbor, click here to read FAQ #37.
Joint Statement by Secretary Steven T. Mnuchin and Administrator Jovita Carranza on the Review Procedure for Paycheck Protection Program Loans
WASHINGTON - U.S. Treasury Secretary Steven T. Mnuchin and U.S. Small Business Administrator Jovita Carranza issued the following statement today on the Paycheck Protection Program (PPP):
"The Paycheck Protection Program is providing critical support to millions of small businesses and tens of millions of hardworking Americans.
We have noted the large number of companies that have appropriately reevaluated their need for PPP loans and promptly repaid loan funds in response to SBA guidance reminding all borrowers of an important certification required to obtain a PPP loan. To further ensure PPP loans are limited to eligible borrowers, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender's submission of the borrower's loan forgiveness application. Regulatory guidance implementing this procedure will be forthcoming."
"We remain fully committed to ensuring that America's workers and small businesses get the resources they need to get through this challenging time."
SOURCE: Small Business Administration, News Release April 28, 2020
Should you have questions about this change or wish to pay back the loan in full before the May 14, 2020 deadline, please contact us as soon as possible.
We would also like to remind you of the Five Rules for PPP Borrowers below. To review the previous PPP update, click here.
Stay up-to-date on the latest PPP news.PPP Updates