The Treasury Department has extended the repayment date for the Paycheck Protection Program (PPP) Safe Harbor from May 7th to May 14th. The extension is automatic; borrowers will not need to apply for an extension as it will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
Certification Review Guidance
Additional guidance on how the SBA will review the certification is expected prior to May 14, 2020. Without knowing what the additional guidance will involve, we recommend borrowers who are concerned with the certification, should prepare now by documenting the reasons they believe they qualify for the loan. By preparing in advance, once guidance is provided, borrowers will be able to make the best possible decision for their specific situation.
Employee Retention Credit
Clarification regarding eligibility for the Employee Retention Credit after a borrower/employer repays the PPP loan before the safe harbor deadline of May 14th has been included in the FAQs updated on May 6, 2020.
The response to FAQ 45 states: “An employer that applied for a PPP loan, received payment, and repays the loan by the safe harbor deadline (May 14, 2020) will be treated as though the employer had not received a covered loan under the PPP for purposes of the Employee Retention Credit. Therefore, the employer will be eligible for the credit if the employer is otherwise an eligible employer for purposes of the credit.”
To review the FAQs that were updated on May 6, 2020, pertaining to the required certification on the Borrower Application Form, click here.
Please note that Questions 40 – 42 were published May 3, 2020, Questions 43 – 44 were published May 5, 2020, and Question 45 was published May 6, 2020.
DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.