SBA Guidance Issued on “Borrower Need” Certification for Paycheck Protection Program

Wiley Rein – Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and as stated in the PPP loan application, in order for a borrower to be eligible for a PPP loan, the borrower must certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”  On April 23, 2020, it issued FAQ 31 which stated “Borrowers must make this [borrower need] certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”

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