Based on new guidance issued yesterday, the SBA has automatically extended the Safe Harbor date from May 7, 2020 to May 14, 2020. The SBA created the Safe Harbor in its last guidance, and it permits PPP borrowers an opportunity to repay their PPP loans if they conclude they might not have been eligible for the loan or might have misstated any information in their PPP loan application.
The new guidance states as follows:
Question: FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date? Answer: SBA is extending the repayment date for this safe harbor to May 14, 2020. 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.