New SBA-Issued Guidance on Payment Protection Program (PPP)

On May 13, 2020, one day before the expiration of the relevant “safe harbor” deadline, the Small Business Administration (SBA) issued new guidance to borrowers who have been considering whether to return their CARES Act Paycheck Protection Program (PPP) loans in the event that the borrowers failed to consider their access to alternative sources of liquidity before certifying the “necessity” of the PPP loans. In “SBA Issues Critical New Guidance on PPP Borrowers’ Certification of Necessity,” colleagues John E. Jensen, David B. Dixon, Elizabeth Vella Moeller and Matthew Oresman discuss how this new guidance purports to reduce significantly the risk to borrowers arising from a later determination by SBA that the borrower lacked an adequate basis for its certification.