SBA Guidelines on PPP Loans


The SBA clarified that companies that have adequate sources of liquidity would not meet the certification requirements to obtain a PPP loan.  If a company already received a loan and does not meet the new requirements they can pay back the loan in full by May 7 without any action by the SBA.  Here are the guidelines from the SBA:


+Before submitting a PPP application, all borrowers should review carefully the required certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” 


+Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.

For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. Lenders may rely on a borrower’s certification regarding the necessity of the loan request.


+Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.  


If you need to talk through specific options for your business, Molly, Paula, and I are here to help.  Schedule a 30 minute consultation via Zoom where we will discuss your specific business situation for only $49.  


If you have any questions, feel free to reach out to any of us.  And keep checking our emails, blog, and social media for updates.  

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