On the morning of May 13, 2020, the Small Business
Administration (SBA) clarified how it will review a borrower's
good faith certification concerning the necessity of their Paycheck
Protection Program (PPP) loan request.
As discussed in previous Alerts, a borrower certified that
"current economic uncertainty makes this loan request
necessary to support ongoing operations" on the application
form for the PPP loan.
Today's guidance under FAQ 46 provides a
safe harbor that any borrower, together with its affiliates, that
received PPP loans with an original principal amount of less than
$2 million will be deemed to have made the required certification
concerning the necessity for the loan request in good faith.
