On May 20, 2020, the U.S. Small Business Administration (“SBA”) posted a thirteenth Interim Final Rule on Second Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan and Lender Reporting. This Interim Final Rule revises the interim final rule posted on May 8, 2020, by extending the date by which certain Paycheck Protection Program (“PPP”) borrowers may repay their loans from May 14, 2020 to May 18, 2020, in order to avail themselves of a safe harbor with respect to the certification required by the Act, and by extending the time-frame for submission of the initial SBA Form 1502 report for PPP loans. SBA previously announced this extension in the nonbinding Frequently Asked Questions. (See FAQ #47) posted on May 13, 2020. This rule is being issued to allow for immediate implementation of this program.
Section 1. The CARES Act requires each applicant applying for a PPP loan to certify in good faith “that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing obligations” of the applicant. SBA, in consultation with the Department of the Treasury, determined that it is necessary and appropriate to further extend the safe harbor deadline for repaying PPP loans from May 14, 2020 to May 18, 2020 as indicated in FAQ #47 posted on May 13, 2020.
Consistent with section 1102 of the CARES Act, the Borrower Application Form requires PPP applicants to certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Any borrower that applied for a PPP loan and repays the loan in full by May 18, 2020 will be deemed by SBA to have made the required certification in good faith. The Administrator, in consultation with the Treasury Secretary, determined that this safe harbor is necessary and appropriate to ensure that borrowers promptly repay PPP loan funds that the borrower obtained based on a misunderstanding or misapplication of the statutory certification standard.
Section 2. Because of the extension of the safe harbor deadline from May 14, 2020 to May 18, 2020 and to promote the administrability of the PPP, SBA is further extending the timelines for reporting Form 1502 information, such that lenders must electronically upload SBA Form 1502 reporting information by the later of: (1) May 29, 2020, or (2) 10 calendar days after disbursement or cancellation of a PPP loan. The Administrator, in consultation with the Treasury Secretary, believes that clarifying timelines for lender reporting will enable lenders to swiftly close and disburse loans and will enhance the administrability of key program components by enabling lenders and SBA to process data regarding loan disbursements and cancellations in a streamlined manner.
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