Dispatch #39 - Keep Your PPP Loan

The Department of the Treasury issued guidance today that puts to rest the question of whether a small business should return its PPP loan in order to avoid criminal liability. The answer is, “No. Keep your PPP loan and do your best to retain and rehire employees.”

To summarize the main points in FAQ #46:

For companies with PPP loans less than $2 million

• Automatic safe harbor grant of “good faith” certification;

• No audit.

For companies with PPP loans greater than $2 million

• These loans will be reviewed by the SBA;

• If the SBA determines the business didn’t qualify for the loan, it "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 pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning the necessity of the loan request.”

The good news here is that a huge distraction has been eliminated. The millions of honest business owners doing their best to comply with the spirit of the PPP can keep the funds, put them to productive use, and try to optimize forgiveness.

Need help with this or other financial matters faced by construction contractors? Let’s talk!

David Stern CFO makes every effort to provide useful and accurate information. This content, however, is not intended as a substitute for specific business-related financial advice. We disclaim all warranties and liabilities from its use.