April 30, 2020
HBE LLP has been monitoring the updates that the SBA has been releasing since it began funding the Paycheck Protection Program (PPP) and we have communicated those updates to you as we have become informed. The guidance is now becoming more defined and we feel it is important to share the new clarification on PPP qualifications with you.
Recently, the SBA updated its Frequently Asked Questions Document. The new FAQ provides additional guidance regarding program qualifications specific to businesses with access to other sources of liquidity to support their ongoing operations. The certification at time of application that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant" has not changed.
Any business that received a PPP loan prior to the issuance of this new guidance, and who now believes that they do NOT demonstrate the necessity for the loan, can repay the loan in full by May 7, 2020. Any business that does so, will be deemed by the SBA to have made the required good faith certification on their PPP loan application.
It is important to note that, like all funds from federal programs, PPP loans will be public information at some point in time. If you have a sensitivity to this information about your business and its loan amount becoming public knowledge, the payback may be something to consider. Additionally, Treasury Secretary Mnuchin has indicated that the government will perform a full audit on any company receiving $2 million or more from the PPP loan program.
We know it is a challenge to assess how your business will be affected by the ongoing pandemic. If you have not yet started doing so, we strongly encourage you to begin documenting all disaster-related business impacts you have experienced or believe you will experience in the coming months. Things to consider would include declines in sales, increases in costs, customer losses, shutdown periods, etc.
We recognize that these are difficult times and we remain committed to supporting you. HBE is here to help you navigate these decisions and to help provide tools for managing the forgiveness aspect of this program going forward. For additional PPP information, please click here.