A safe harbor deadline most recently set for May 14 has been extended for the second time by the Small Business Administration.
In guidance announced late Wednesday, the SBA said that businesses that received loans under the Paycheck Protection Program now have until May 18 to repay those loans. The date already had been moved once, to May 14 from May 7.
The new guidance could help ease business owners unsure about the legal consequences of repaying loans taken under the $686 billion PPP established in late March. The new SBA announcement clarifies that employers that accepted those loans will have until May 18 to repay them in full, and at that point, they will be “deemed by the SBA to have made the required certification in good faith.”
The SBA previously announced that companies that accepted loans for less than $2 million will automatically have had the required certification of necessity in good faith. Companies that took loans for more than $2 million are still subject to review to ensure the business met the certification requirements for taking the loan; borrowers who are found to be ineligible will be required to return the loan without further action.
The late Wednesday announcement was one of two key provisions from the SBA posted to its PPP Frequently Asked Questions page. Answers to Questions No. 46 and 47 were announced Wednesday.
If you have questions about PPP loans and issues involving repayment, reach out to a professional at KraftCPAs.