The Treasury and SBA released guidance today on the required good-faith certification in relation to the necessity of PPP loans. The guidance can be viewed here.
Any borrower, together with its affiliates, that received PPP loans of $2 million or less will be deemed to have made the required certification concerning the necessity of the loan request in good faith. No further action is needed.
Any borrower with loan proceeds greater than $2 million may still make the required good-faith certification. We recommend companies that received PPP loans exceeding $2 million, document in board minutes the reasoning for the necessity of the loan. If the SBA determines the lack of adequate basis for the required certification, the SBA will seek repayment of the outstanding PPP loan balance and will inform the borrower that they are not eligible for loan forgiveness. If the borrower repays the loan after receiving notification, the SBA will not pursue any enforcement.
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