SBA Extends Certification Safe Harbor Repayment Date By One Week

On May 5, 2020, the Small Business Administration (“SBA”) newly issued limited guidance on the Paycheck Protection Program (“PPP”) extending the safe harbor for loan repayment to May 14, 2020.  Earlier guidance had reminded borrowers to carefully review the certification on the borrower’s application that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” and established that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 would be deemed by SBA to have made the required certification in good faith.

Now, SBA is extending the repayment date for this safe harbor to May 14, 2020.  Borrowers do not need to apply for this extension as the extension will be promptly implemented through a revision to the SBA’s interim final rule.  SBA also stated that additional guidance on how it will review the certification will be issued prior to May 14, 2020.