The Small Business Administration (SBA) has updated a guidance document to extend a “safe harbor” deadline and clarify economic necessity certification requirements under the Paycheck Protection Program (PPP). The guidance lays out SBA’s policy determination that businesses receiving less than $2 million will not have to certify the economic necessity of a PPP loan (SBA deems them to have made the necessity certification). Companies receiving more than $2 million can still prove their economic need, but the applications will be subject to review by SBA and the Department of Treasury.
If a company has received more than $2 million and is uncertain if they can adequately prove economic necessity, the guidance also extends the “safe harbor” period to repay the principle loan amount to Monday, May 18th.
Effectively, companies receiving less than $2 million and companies receiving more than $2 million but who have repaid in full by Monday, May 18th will be acknowledged as having acted in good faith. All other loan recipients will be subject to likely SBA review and may lose forgiveness eligibility if it is determined that they did not prove adequate financial necessity for the loans. For more information, please consult with your accounting or tax professional give and review questions 46 and 47 on the SBA’s PPP FAQ document.
New COVID-19 Safety Guidance for Manufacturers
The Center for Disease Control and the Occupational Safety and Health Administration have released a manufacturing-specific guidance detailing steps for companies to take to protect their workforce. The guidance is available here. For all HPBA information on COVID-19, please visit www.hpba.org/coronavirus.