Yesterday, the U.S. Treasury and Small Business Administration stated that businesses seeking less than $2 million in emergency relief via the Paycheck Protection Program will be considered qualified unless it is proven otherwise. Many small businesses were initially denied access to the PPP, which is why this comes as a welcome message to all. Furthermore, the U.S. Treasury and the SBA clarified that small businesses will not be penalized for taking these loans, and that if they do take the loans, they will not face complex or financially damaging audits for not meeting some of the program’s terms.
Additionally, the agencies also announced that they would not penalize any company that improperly received loans, as long as they simply pay the money back.
The exact wording of this decision, provided in the U.S. Treasury’s Frequently Asked Questions Guide, is as follows: “When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates,20 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 of the loan request in good faith.”
For any additional questions regarding the Paycheck Protection Program and how it may benefit your small business, please do not hesitate to give our experienced Pennsylvania business law attorneys a call today. We are here to help you through every step of the process ahead to help ensure your business continues to thrive despite these unprecedented times.
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