Updated Paycheck Protection Program (PPP) Loans Frequently Asked Questions
April 30, 2020
By: Mark A. Mangano
The U.S. Department of Treasury updated its Paycheck Protection Program Loans Frequently Asked Questions (FAQs) to add questions 38 and 39.
Question 38 addresses eligibility. It provides an interpretation of the “in operation on February 15, 2020” requirement for eligibility for participation in the PPP. Under certain circumstances, the acquirer of a business or substantially all of the assets of a business in existence on February 15, 2020 may be eligible using the status and employee information of the acquired business to determine eligibility and maximum loan amount of the acquiring business.
Question 39 directly addresses eligibility but in fact indirectly addresses forgiveness. It confirms previously reported suggestions that the SBA will review all loans in excess of $2 million and other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application. The FAQ suggests that the review is related to the required borrower certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” However, the Treasury has not made clear the scope of the review process. The Treasury promises further guidance. It does confirm that reviews will not impact the SBA guarantee of any loan for which the lender complied with its obligations to confirm receipt of borrower certifications, receipt of information demonstrating that a borrower had qualifying employees, and the average monthly payroll costs by reviewing the documentations submitted with the application.
The updated FAQs are available here.