On May 14th, the U.S. Department of Treasury released new guidance for the Paycheck Protection Program. Loans of less than $2 million will not face heightened scrutiny and will not face further review following the lender’s submission of loan forgiveness.
Previously, the Department’s guidance required borrowers to make a good-faith certification to the Small Business Administration that current economic uncertainty made their loan request necessary to support ongoing operations. Borrowers must make this certification 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. Loans of less than $2 million will be deemed to have satisfied the good-faith certification requirement and will not be subject to any further review following the review of loan forgiveness.
Morgan R. Johnson