Important Update for PPP Borrowers: Safe Harbor Deadline Extended and Hope for Clear Guidance on Eligibility

There is welcome news this week for nonprofits concerned about their eligibility to qualify for loan/grants under the Paycheck Protection Program (PPP).

The Small Business Administration administering the PPP program added an FAQ (#43) late on May 5 extending the safe harbor deadline for organizations considering returning PPP funds from May 7 to May 14 and stating the government’s intention to provide further guidance on eligibility in the meantime.

In recent days, more churches and ministries have been concerned about their eligibility for the program due to the lack of clear guidance and promises by governmental leaders to audit certain PPP fund recipients in response to press reports on possible abuses of the program.

In particular, the PPP Borrower Application Form requires that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” However, there has not been the definition needed around some important terms in the certification, such as “current” and “necessary.”

This latest move by the SBA will offer at least another week and hopefully additional clarity for organizations as they evaluate their eligibility for the program with professional counsel.

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.