Important Treasury Guidance on PPP Loan Applications
Dear WANADA Members,
In Question 46 of
Treasury's PPP Frequently Asked Questions resource, the department says that applicants who request $2 million or less from the program will be automatically deemed to have acted in good faith. Treasury and the SBA are establishing this threshold in order to better focus on auditing the very large requests for funds, as outlined in the
interim final rule published last week.
For purposes of this safe harbor rule, the Treasury Department is defining "applicants" and "$2 million" as being the maximum amount of money applied for by a business, including "it's affiliates." For more information on how the government is determining affiliates, please refer to
citation 85-FR-20817 in the federal register.
If you have any questions, we strongly encourage you to read Question 46 in full, and to review it with your business and financial advisors. If a business receives over $2 million in funds, and is later found to have not met the necessary eligibility requirements, they will not be subject to additional government enforcement actions so long as they repay the loan in a timely manner.
To that end,
under
Treasury guidelines
, any PPP loan recipient
who does not actually need the funds to "support the ongoing operations of the Applicant" may return the funds by May 14 and be held harmless. Applicants who return the funds by tomorrow will also be eligible to claim other resources established through the
CARES Act
, including the
Employee Retention Tax Credit
.
We anticipate that there will be further clarification down the line as to whether businesses that are audited after May 14, and who must return their PPP funds, will remain eligible to claim other CARES Act funding resources. As for the current round of PPP funding itself, more than $100 billion in funds remain available to be claimed
as of 5 p.m. on May 12.
