On April 23, the U.S. Small Business Administration (SBA) and Department of the Treasury issued new guidance (see question #31) that puts Paycheck Protection Program (PPP) borrowers and potential borrowers on notice that they should be able to prove in “good faith” that “[c]urrent economic uncertainty makes this loan request necessary to support [their] ongoing operations” to be eligible for the loan.
This appears to be a warning to PPP borrowers of the possibility of federal audits and investigations to come. The guidance goes on to state that any “borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020, will be deemed by SBA to have made the required certification in good faith.”
While there is much ambiguity in this guidance, the message is clear that AGC members should have documentation of their market uncertainty and corresponding operational need for these PPP loans when they signed the loan application.
To help inform AGC Chapters and members about this development, we put together an AGC ConstructorCast podcast on April 24 concerning updated PPP program guidance and what it means for construction firms (which was included in an all member COVID-19 email update). You can watch it HERE and listen to it HERE.
AGC of America will provide additional information regarding this guidance as it becomes available.