Connect with us

News

Small Business Admin. Releases New FAQ on PPP Loans

The U.S. Small Business Administration, in consultation with the U.S. Department of Treasury, released an updated FAQ document on May 13 concerning the implementation of the Paycheck Protection Program (PPP).

Click Here to Read More
Advertisement

The document shows that the SBA has determined that loans with an original principal amount of less than $2 million will be deemed to have made the requisite certification regarding the necessity of the loan “in good faith.” This information can be helpful to tire dealers who are awaiting guidance on the forgivability of PPP loans.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Advertisement

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form.

If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning the necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

Advertisement

To read the full FAQ document, click here.

Advertisement
Click to comment

POPULAR POSTS

Tire-Tariff-DOC-Investigation Tire-Tariff-DOC-Investigation

News

DOC Revises Tariffs on Chinese TBR Tires

Hankook-Curtis Brison President North America Hankook-Curtis Brison President North America

People

Brison Named President of Hankook Tire North America

News

TBC Corporation Donates to Three Non-Profits

News

Continental to Buy Natural Rubber Via Digital Trading Platform

Connect
Tire Review Magazine