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COVID-19

Paycheck Protection Program: Additional Guidance

Paycheck Protection Program: Additional Guidance

On April 23, 2020, the U.S. Small Business Administration (the “SBA”) issued new guidance regarding the economic need certification required of borrowers under the popular Paycheck Protection Program (“PPP”), which could render some companies ineligible even if they were previously approved for the PPP. This guidance was reinforced by comments made on April 28, 2020 by Treasury Secretary Steven T. Mnuchin in a CNBC interview, during which he also announced that any company receiving more than $2 million through the PPP would be audited.

Based on this new information, as detailed in the attached document, all companies that have received PPP loans—as well as those who have applied but not yet received funding—must immediately review whether they are, in fact, eligible. Companies determined to be ineligible have until May 7, 2020 to return the funds without penalty.