PPP Update: SBA Guidance on Good Faith Certification

5/14/2020


On May 13, 2020, the Small Business Administration (SBA) and Department of the Treasury provided clarification for organizations and businesses taking Paycheck Protection Program (PPP) loans. 

Read that updated FAQ here

In the update they shared that organizations taking a PPP loan with an original principal amount of less than $2 million will automatically be granted safe harbor relief with regard to the “good faith certification” it is required to provide.

According to the FAQ, the “SBA has determined that this safe harbor is appropriate because borrowers with loans below this [$2 million] threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees.”

Businesses and organizations taking loans greater than $2 million will be subject to a compliance review by the SBA. 

While it is helpful to know that there may not be a compliance review, churches should spend, account for, and act as if there WILL be a review.


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