SBA Softens Guidance on PPP Need Certification

On May 13, 2020, the SBA published the promised additional guidance regarding the good-faith certification of need for PPP loans and substantially softened its position. Under the new guidance, borrowers with PPP loans under $2 million will be deemed to have made the need certification in good faith. This is great news for smaller borrowers that had concerns about the SBA’s prior guidance regarding the need certification. There is great news for borrowers with loans over $2 million as well; if the SBA later determines that the borrower lacked a good faith basis for the certification of necessity, the SBA will give the borrower an opportunity to repay the loan before pursuing penalties. The Safe Harbor deadline to return the PPP loan and avoid the need issue has been extended to May 18, 2020. See SBA FAQ #46 and #47, available at: