SBA Extends May 7 Safe Harbor Date to May 14, Will Issue New Guidance

The Department of Treasury has updated its Frequently Asked Questions guidance (found here) with a new FAQ #43 stating the Small Business Administration has extended the safe harbor date, from May 7, 2020 to May 14, 2020. This is the date by which borrowers can repay loans and be deemed to have made the necessity-based certification contained in the PPP loan application in good faith. This certification was addressed in FAQ #31 and FAQ #37 in the guidance linked above and was the subject of a previous update. The safe harbor was established by regulation published by the Department of Treasury on April 28, 2020, which provides that borrowers who applied for PPP loans prior to the date of that regulation can take advantage of the safe harbor. FAQ #43 also provides that the SBA intends to issue more guidance on how it will review the certification prior to May 14, 2020. That guidance will likely be relevant for applicants for PPP loans who applied after April 28, 2020 as well.

If you would like further information or to discuss this guidance, please contact Greg Gorospe or Chris Magill of Ice Miller’s COVID-19 Task Force.

Please contact our COVID-19 Task Force if you have any questions about managing the risks of the coronavirus pandemic. Our Task Force leadership consists of partners Josh Christie, Tami Earnhart and Christina Fugate. Also see our Coronavirus (COVID-19) Resource Center for additional resources, which is updated daily.