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I Received PPP, Should I Keep it?  8 True answers = Yes

Business Sales and M&A Specialists

May 11, 2020

In these extraordinary and uncertain times, you may have welcomed the Paycheck Protection Program and been in compliance when applying. However, rules have changed.  You must certify that the following 8 facts are true and verifiable.

If the Answer is “True” for Each Statement, by all means sign, keep & document all expenses using PPP!  If one answer is Not True, you have only a few days, until May 14th, to return funds or simply choose not to sign. Always seek the legal and financial help from your advisors if you have questions or are in doubt.

  1. Your business was operable on February 15, 2020 and you paid salaries and taxes to employees;
  2. The “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”;
  3. You will use funds for authorized purposes, including retaining workers, payroll, mortgage, lease and utility payments;
  4. You will verify the number of full-time employees and payroll costs to their Lender;
  5. Only 25 percent of the forgiven loan amount will be for non-payroll costs;
  6. You will only receive one PPP loan;
  7. You must certify that the information provided in the loan and supporting documents is accurate; and
  8. You “…acknowledge that the lender will confirm the eligible loan amount” and “agree that the Lender can share any tax information” with the SBA and SBA representatives.

Failure to satisfy these Certifications may result in criminal penalties for knowingly and willfully falsifying the PPP application, making false statements, embezzlement, concealment and misrepresentation. Depending on the charges, sentences may be up to 30 years of jail time and/or fines up to $1,000,000. While the potential penalties are harsh, SBA guidance and regulations provide borrowers a safe harbor, which was recently extended from May 7, 2020 to May 14, 2020. This allows any PPP borrower to fully repay their loans by May 14, 2020.  With full repayment, the good faith requirements for the loan Certifications will be met….

As the SBA continues to clarify the rules and regulations surrounding the PPP, applicants and PPP fund recipients may want to cautiously consider their eligibility for relief, collect documentation supporting their applications and be prepared to justify receipt and use of PPP funds.

If you wish to stay up on ALL the updates, keep watch on SBA’s FAQ page:  https://www.sba.gov/document/support–faq-lenders-borrowers.