Today, May 13th, the Treasury released FAQ #46, which provides that any borrower where they, together with affiliates, received Paycheck Protection Program (PPP) loans of less than $2 million are deemed to have met the economic uncertainty test. This decision comes on the heels of extensive discussion regarding how businesses that received PPP loans could verify that, due to economic uncertainty, they needed the funds to support their ongoing operations.
Initially, when the Treasury published FAQ #31, the concern was that borrowers had to “take into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”
As was stated before, the Treasury’s intent is to still review all loans of $2 million or more. The FAQ states that based on individual circumstances, the Treasury still may have an adequate basis for making the required good-faith certification. After review, if the SBA determines the borrower lacked an adequate basis for required certification regarding economic uncertainty, the borrower will be required to repay the loan.