The Treasury Department and Small Business Administration on Wednesday extended the safe harbor repayment date with respect to earlier “economic certifications” made by borrowers under the Paycheck Protection Program from May 7 to May 14.
“Numerous prior borrowers have been evaluating whether to return the PPP funding they had received, taking into account potential criminal and civil liability risks the False Statements Act and False Claims Act in connection with their prior certification,” Eversheds Sutherland explains in a recent legal alert.
In light of updated frequently asked questions guidance, “the Treasury and SBA announced that for any borrower that previously applied for a PPP loan prior to April 23, 2020, SBA will view the certification to be made in good faith if the loan is paid in full by May 7,” Eversheds explains.
Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza said in a joint statement in mid-April that SBA 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, SBA said.
Treasury and the SBA also announced that the “SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.”