Applied For A PPP Loan? Simple Steps Now To Avoid Government Scrutiny Later

With the onslaught of COVID-19 business closures, the government invited businesses around the country to apply for CARES Act relief to help survive the closures. Many have chosen to apply for assistance through the Small Business Administration's (SBA) Paycheck Protection Program (PPP). Now, businesses that applied for a PPP loan have a chance to change their minds if they return the money by May 7, 2020. Specifically, on April 24, 2020, the SBA:

• Acknowledged some aspects of the PPP loan application process were confusing;
• Released updated FAQ Guidance to assist;
• Issued an Interim Final Rule regarding the "necessity" certification required for PPP applications; and
• Established a "limited safe harbor" for return of the money so that any "borrower that applied for a PPP loan prior to the issuance of this [April 24] regulation and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith."