On 5/13, #SBA provided some relief for #smallbiz concerned with possible SBA audits, particularly related to “economic need” certifications and the “good faith” safe harbor. But, #PPP loan recipients did not receive a full reprieve from all challenges. kaneesq.com/insights/ppp-l…
Despite the grace for “economic need” certifications, #SBA audits and post-hoc reviews still present significant risks for borrowers and even lenders, regardless of the #PPP loan amount.
Borrowers of less than $2 million should still prepare for potential #SBA audits and post-hoc reviews, particularly if they apply for #PPP loan #forgiveness. These reviews will likely require borrowers to substaniate size, #affiliations, #NAICS code, and even #creditworthiness.
#Lenders, while generally immune to #PPP loan issues, are still vulnerable to the risks of #SBA audits and post-hoc reviews. As banks prepare to accept forgiveness applications, they should work with borrowers within their portfolios to prepare for SBA’s post-hoc reviews.
Notably, borrowers with #PPP loans of $2 million or more that believe they had adequate sources of #liquidity or conventional lending at the time of their PPP loan application must still consider whether to take advantage of the #safeharbor and return the funding by 5/18/2020.
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