The PPP Loan Tsunami & Potential Liability: Were You Eligible? Should You Return Funds? Be Prepared for SBA Audits!
The Paycheck Protection Program (PPP)—part of the CARES Act stimulus law—was created on March 27, 2020, and rushed into implementation within a week. Emergency regulations, including the final PPP application, were issued the evening of April 2, and, the next day, lenders were accepting applications and authorized to issue PPP loans. Because there was fixed pool of PPP funding, and loans were on a “first-come, first-served” basis, there was a mad rush by small businesses all over the country to submit applications immediately, and the funding was depleted in under two weeks. Additional funding was authorized last week, most of which has been (or is expected to be) used for applications that were already in queue but unable to be funded.
This webinar focuses on very recent developments regarding the PPP under which a total of $660 billion in potentially forgivable loans has already been (or is about to be) issued. The Small Business Administration (SBA) continues to issue “after the fact” guidance, including on eligibility criteria, on a semi-daily basis.
Now that the dust is starting to settle on the tsunami of PPP applications and loans, loan recipients should reassess whether they were actually eligible. If they were not eligible, loan recipients should return the funds very soon to avoid potential civil and criminal liability.
During this complimentary 45-minute webinar, we discuss the following:
- Based on recent SBA guidance, do you still have a “good faith” basis regarding your eligibility?
- Do you meet the “500 or less” employee standard, taking into account the “affiliation” rules?
- Did you properly calculate “payroll costs” in your application
- Was the loan “necessary,” and did you consider your access to other sources of funds?
- The SBA will be closely scrutinizing whether to approve “Applications for Forgiveness” of PPP loans, and can audit loans after the fact
- Consider obtaining a “third party” assessment/report to confirm your good-faith basis of eligibility for your PPP loan
John D. Barry
Associate, Health Care and Life Sciences Practice
Epstein Becker Green
Mark Fagan, CPA
Gary W. Herschman
Member, Health Care and Life Sciences Practice
Epstein Becker Green
If you have questions regarding this event, please contact Eury Jung.