Updated Guidance from the SBA regarding Good-Faith Certification and Safe Harbor – Deadline Extended to May 18

On May 13, the SBA issued additional guidance expanding the terms of the safe harbor in advance of the proposed Safe Harbor Deadline of May 14. Having completed the application for a PPP loan, borrowers have already certified that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Growing concern about this certification, without explanation of its interpretation by the SBA, left many borrowers wondering whether they should return loan funds or use the funds according to the borrower's interpretation of the rules and risk potential penalties. The SBA has clarified the loans of less than $2 million are now included in the safe harbor, as the SBA has determined that borrowers with loans below $2 million are less likely to have access to other sources of liquidity. Therefore, borrowers of loans less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. It is important to remember that loans in excess of $2 million, and other PPP loans as deemed appropriate by the SBA, may still be subject to review. A reviewed loan could possibly lose eligibility for forgiveness, but if the loan is repaid, additional enforcement will not be pursued. Further, the SBA has extended the deadline until May 18 for borrowers to consider this new safe harbor opportunity and possible return of funds.

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SFA Partners is a family of companies focused exclusively on empowering independent financial advisors. SFA Partners includes The Strategic Financial Alliance (SFA), member FINRA/SIPC, a broker-dealer and investment adviser; Strategic Blueprint, a registered investment adviser; and SFA Insurance Services. Our wide breadth of services enables us to support a variety of advisor business models. Parent company, SFA Holdings, Inc. is owned by advisors, employees, and individual investors.