May 13, 2020, 6:04 PM
(from the Department of the Treasury) Updated on May, 14. On May 13, the Department of the Treasury released FAQs clarifying the SBA’s interpretation of the CARES Act and of the Paycheck Protection Program (PPP) Interim Final Rules. The final question, number 46, which addresses safe harbor, may be of particular interest to independent schools. It explains "Any borrower that, together with its affiliates, 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." Organizations receiving more than $2 million may be audited and asked to return the money if conditions for forgiveness are not met.
Later in the day on May 13, the SBA announced it is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider the new information. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
Download the Department of Treasury FAQs on PPP Loans (PDF). NBOA staff have highlighted the answers most relevant to independent schools in this PDF.
For more on supporting the good faith certification of need, see guidance from Venable LLP on May 8 (article) and May 11 (on-demand webinar).
For more on the extension of the repayment deadline and loan increases, see guidance from blumshapiro.
Listen to the latest episode of the Net Assets podcast.
