May 6, 2020

Safe Harbor Deadline for Repayment of PPP Loans Extended from May 7 to May 14

SBA Indicates Further Guidance on Certification Review to Come
Holland & Knight Alert
David S. Cole | David A. Surbeck | Tim Ryan | Daniel T. Sylvester

The U.S. Small Business Administration (SBA), in consultation with the U.S. Department of the Treasury, has extended the deadline to repay Paycheck Protection Program (PPP) loans by one week.

In further response to the SBA's recent guidance in FAQ 31 reminding borrowers to review carefully the certification required for PPP loans that "[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant" and providing a safe harbor to repay any PPP loan by May 7, 2020, so as to avoid any contention that such certification was not in fact made in good faith, the SBA released FAQ 43 on May 5, 2020.

In FAQ 43, the SBA advises that:

  • SBA is extending the repayment date for the safe harbor to May 14, 2020.
  • Borrowers do not need to apply for this extension.
  • The extension will be promptly implemented through a revision to the SBA's interim final rule providing the safe harbor.
  • SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.

Next Steps

Borrowers of PPP loans should consider carefully both the new deadline and the expected additional guidance on how the SBA will review certifications, if feasible, before submitting an application or deciding whether to retain borrowed PPP funds.

For a discussion of various factors that borrowers could consider when making this determination, see Holland and Knight's previous alert ("Key Factors for Companies to Consider When Certifying Their PPP Need," April 25, 2020).

Please contact the authors or any Holland & Knight attorney you have been working with regarding a PPP loan with questions about certification.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the author of this alert for timely advice. 

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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