FAQ #46 Addresses PPP Good Faith Certifications

On May 13, 2020, the U.S. Department of the Treasury (the Treasury) and the Small Business Administration (SBA) issued Frequently Asked Question (FAQ) #46 related to Paycheck Protection Program (PPP) certifications. FAQ #46 provides additional guidance on how the SBA will review the required certifications on the PPP Borrower Application Form when determining whether they were made in good faith. Previously, FAQ #31 (see DHG’s previous guidance on FAQ #31 titled Certifying Your PPP Loan) states that a PPP borrower should review its certification on the PPP loan application and reassess its economic need for a PPP loan at the time of the loan application. FAQ #31 also provided a safe harbor for any borrower that applied for and received a PPP loan prior to the issuance of FAQ #31 and who repays the loan by May 7, 2020, would be deemed to have made the certification in good faith. FAQ #43 extended the safe harbor repayment date from May 7, 2020, to May 14, 2020.

FAQ #46 provides a tiered approach to the SBA’s certification review process and a safe harbor for loans under $2 million. Specifically, “Any borrower that, together with its affiliates,[1] received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.” The SBA has previously stated in FAQ #39 that it will review loans in excess of $2 million following the lender’s submission of the borrower’s application of forgiveness for program compliance, including borrower’s certifications. FAQ #46 states if the SBA determines during its loan review that the borrower did not satisfy the Borrower Application Form certification for the necessity of the loan, “SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness.” If the borrower repays the loan, the SBA will not seek administrative enforcement or make referrals to other agencies. It is unclear at this time whether the loan must be repaid at the time the SBA makes its determination that the required certification of need lacked an adequate basis or if the borrower will have until the original maturity date of the loan for repayment.[2]

For questions or additional information about PPP certifications and other FAQs issued by the Treasury and the SBA, please contact us at CARESActQuestions@dhg.com.


[1] For purposes of this safe harbor, a borrower must include its affiliates to the extent required under the interim final rule on affiliates, 85 FR 20817 (April 15, 2020).

[2] Businesses participating in the PPP should be aware that information submitted as part of the PPP is subject to the Freedom of Information Act (FOIA) and could be made publicly available based on such FOIA requests.


Denny Ard
Managing Partner, DHG Solutions Lab
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