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SBA Extends PPP Certification Safe Harbor to May 14

SANFORD MICHELMAN, BRYAN JOHNSON
MAY 6, 2020


As you probably know by now, Michelman & Robinson has filed a lawsuit on behalf of three tech company clients challenging the guidance/FAQs issued by U.S. Treasury and the SBA regarding the Paycheck Protection Program. Though the guidance is now the subject of litigation, the SBA has nevertheless updated the FAQs to extend the so-called “safe harbor repayment” date from May 7 to May 14, 2020.

As Michelman & Robinson has previously reported, FAQ No. 31 directs PPP borrowers to carefully review the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” For borrowers wary about certifying this to be true, they have an out. According to the SBA and Treasury’s guidance/FAQs, any borrower who applied for a PPP loan prior to April 24 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.

By way of this alert, M&R wants its clients and contacts to know that the SBA has extended the repayment date for this safe harbor to May 14, 2020. This one-week extension will be promptly implemented through a revision to the SBA’s interim final rule providing for the safe harbor, and the agency intends to provide additional guidance on how it will review borrower certification prior to that May 14 date.


We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.