SBA Issues New Guidance For Paycheck Protection Program Borrowers

May 13, 2020


As the May 14 deadline looms to return paycheck protection program (“PPP”) loan proceeds if a borrower is unable to certify, in good faith, that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” (the “Certification”), the SBA issued FAQ #46 today. The text of the FAQs can be viewed here.

Two notable points of the new FAQ:

  • Safe Harbor for Loans Under $2 Million. Any borrower who (together with its affiliates) received a loan under $2 Million is deemed to have made the required certification in good faith.
  • Loans in Excess of $2 Million. Borrowers who received more than $2 Million are still able to demonstrate necessity of the loan based on prior guidance. If, however, the SBA determines the borrower lacked an adequate basis for making the certification, the borrower will be required to repay the loan. If the borrower repays the loan after receiving notice from the SBA, the SBA will not pursue administrative enforcement or referrals to other agencies.

We recommend all borrowers, in particular those who received or applied for more than $2 Million, remain cautious with respect to the Certification, and ensure and ensure the they have a good faith basis for making the Certification, which is appropriately documented.

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Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at

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