Treasury and the SBA have issued precious little additional guidance since our last post on Thursday, May 7th. But there has been a little news about the SBA’s coming reviews of borrowers’ good-faith certifications.

The Good News

For loans of less than $2 million, borrowers will be deemed to have made their certifications in good faith. This safe harbor loan amount is for an entire affiliated group, not an individual entity. Even better, for loans of all amounts, if the SBA determines in the future that you did not have an adequate basis for your certifications, you will be allowed to repay the loan. Once you have, there will be no administrative or criminal penalties. (FAQ 46)

The Bad News

Treasury and the SBA are still equating large loan amounts with a lack of need. This is clearly not true. A large loan just means you have a large payroll. Shake Shack, after returning their loan, had to permanently close 10% of their stores and terminate a corresponding portion of their employees.

Both Treasury and the SBA continue to warn that all loans over $2 million will be reviewed. And even though they admit that borrowers with large loan amounts may have an adequate basis for their certifications, Treasury and the SBA still haven’t given any clear guidance on how a borrower’s certification will be evaluated.

Oh, What a Surprise. Not!

Neither Treasury nor the SBA has issued any further guidance on how to calculate loan forgiveness including the two limitations and the exemption.

The calculation of loan forgiveness continues to be a very pressing issue since most of us are in the 8 week loan forgiveness period or soon will be. Treasury and the SBA’s failure to meet their mandated April 26th deadline is continuing to create ever increasing and wholly unnecessary burdens on PPP loan recipients.

We will keep you posted as soon as we get any relevant guidance.