SBA issues IFR extending PPP Safe Harbor

Federal Issues SBA Small Business Lending Department of Treasury CARES Act Covid-19

The Small Business Administration (SBA) recently issued an interim final rule (IFR) to supplement the CARES Act and extend the Paycheck Protection Program (PPP) safe harbor for repayment from May 7 to May 14. Borrowers who received a PPP loan prior to April 24 but determined that the funds were “obtained based on a misunderstanding or misapplication of the required certification standard” will be deemed by the SBA to have made the borrower certification on a loan application in good faith if they repay the loans in full by May 14. Additional guidance on the safe harbor extension is forthcoming. (The SBA first announced the repayment extension last week in updated Frequently Asked Questions, covered by InfoBytes here.) Due to the safe harbor extension, the IFR also extends the deadline to May 22 for PPP lenders to file yet-to-be released Form 1502 in order to receive their lender processing fees. As previously covered by InfoBytes, the SBA stated that PPP lenders must disburse each loan and submit SBA Form 1502 within 20 days of loan approval. The IFR takes effect upon publication in the Federal Register, with comments due within 30 days.