There has been a lot of confusion recently surrounding the Paycheck Protection Program Loan and how companies receiving funds could justify that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant."  FAQ #31 from the Treasury gave companies until May 7th and then May 14th to return the funds should they believe they could not make such certification in good faith. 

Good news!  Treasury just released FAQ #46 that provides updated guidance: "Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith."  This is a safe harbor for borrowers who received less than $2 million in PPP loan funds, as Treasury indicates now that they are assuming companies receiving less than $2 million are less likely to have access to adequate sources of liquidity in the current economic environment.

Those who borrowed greater than $2 million may still have adequate basis for making the required good-faith certification, but those loans will be subject to review by the SBA.  If the SBA finds after an audit that a company should not have received the loan, the SBA will seek repayment of the outstanding loan balance and inform the lender that the loan is not eligible for forgiveness.  Companies can then repay the loan after notification from the SBA without any administrative enforcement or referral to other agencies.

You can find FAQ #46 here.