Paycheck Protection Program’s “Good Faith Certifications” – FAQ No. 46

Margie Swoyer NPA News

  1. New Small Business Administration Guidance
    May 14, 2020

On May 13, 2020, Team GRC’s Cliff Andrews obtained an advance copy of new guidance from the SBA that relates to the SBA’s intentions on auditing borrowers who obtained Paycheck Protection Program (PPP) loans. This guidance – to be published as FAQ No. 46 shortly – contains some very good news for PPP borrowers, such as…

  1. “Any borrower that received PPP loans with an original principal amount of less than $2 million will be deemed to have made the [original application’s] required certification concerning the necessity of the loan requested in good faith.”
  2. The SBA has designated this guidance as offering a “safe harbor” to borrowers whose loans were $2 million or less.
  3. This “safe harbor” for borrowers whose original principal amounts were less than $2 million removes the risk of being:

    a.  reviewed by the SBA for compliance with the CARES Act’s requirements that PPP applicants certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

    b.  subject to administrative enforcement or referrals to other agencies [presumably IRS or DOJ]. and,

    c:  asked by the SBA for repayment of the outstanding PPP loan balance.

  4. The SBA’s new FAQ No. 46 also reassures PPP lenders (banks, etc) that
    the certification regarding the necessity of the loan request “will not
    affect SBA’s loan guarantee.”

This new guidance offers much reassurance to PPP borrowers and lenders. If your PPP loan principal was less than $2 million, you can focus on your business and on any PPP loan forgiveness application with your lender. The NPA has learned that the SBA intends to issue more guidance on PPP loan forgiveness applications and requirements. We will provide information on PPP loan forgiveness applications and requirements as soon as we receive it.

You can read SBA PPP FAQs at–faq-lenders-borrowers using the pdf download and go to page 16 where #46 begins. Also, as our GRC Update May 8 th discussed, you will note FAQ #47 automatically extends the repayment date for this safe harbor to May 18, 2020.

If you have questions or comments, please send them to Fran Bishop, GRC Liaison, at


This GRC Update is not intended and should not be construed as legal advice to NPA members.
Members should consult their own lawyers for legal advice.

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