By: Mark A. Mangano
The Treasury Department issued a rule implementing changes in the Paycheck Protection Program (PPP) eligibility safe harbor and the lender reporting deadlines previously authorized in the Paycheck Protection Program Loans Frequently Asked Questions (FAQs). On May 20, 2020, Treasury issued its Thirteenth interim final rule, “Business Loan Program Temporary Changes; Paycheck Protection Program-Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan and Lender Reporting” (Thirteen IFR).
The Thirteen IFR does not introduce new guidance. It codifies guidance previously provided in response to Questions 47 and 48 of the FAQs.
Implementing FAQ Question 47
Borrowers applying for a PPP loan must certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The Small Business Administration (SBA) has created a “safe harbor” whereby a borrower that applied for a PPP loan and repays the loan by May 18, 2020 will be deemed to have made its “necessity” certification in good faith.
Implementing FAQ Question 48
Lenders must submit Form 1502 reporting PPP loans to the SBA on the later of May 29, 2020 or 10 calendar days after disbursement or cancellation of the PPP loan.