Additional SBA clarifications for loan repayment
Borrowers applying for a Paycheck Protection Program (PPP) loan must certify in good faith that current economic uncertainty makes the loan necessary to continue business operations. Any borrower that received PPP loans with an original principal amount of less than $2 million (along with its affiliates) will be deemed to have made the required good-faith certification. The SBA has determined that borrowers with loans below this threshold are less likely to have had access to adequate sources of liquidity than borrowers that received larger loans at this time.
Borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis to meet the required good-faith certification. If the SBA determines that a borrower lacked an adequate basis, the borrower will be required to repay the outstanding PPP loan balance and the lender will be informed that the loan is not eligible forgiveness. The SBA will not pursue administrative enforcement, etc. if the borrower repays the loan upon receiving this notification.
Visit the PPP FAQs page or KRS’ Coronavirus Resources Page for additional information. KRS professionals are available and happy to assist with loan and grant applications. Please contact us if you have any questions, concerns, or need advisement during this unprecedented time.