New SBA Guidance Provides Comfort to Paycheck Protection Plan Borrowers of Less Than $2 Million
Borrowers are required to certify on their application that, “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
The SBA previously issued guidance that companies with access to capital markets could not make this required certification and that all companies should be prepared to demonstrate to the SBA, upon request, the basis for their certification.
This raised significant concerns with borrowers of loans less than $2 million as to how the test for uncertainty would apply to them. The new guidance, issued today in the form of FAQ 46, alleviates these concerns by providing that any borrowers that received a PPP loan of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.