Some good news has come out for small businesses that have taken out Paycheck Protection Program (PPP) loans of less than $2M — the Small Business Administration (SBA) won’t conduct an audit.
The PPP is the US government’s main stimulus measure to combat the economic impact of the COVID-19 pandemic. It provides forgivable loans to businesses to cover their payroll and other expenses. In order to qualify for the loan, these applicant businesses must certify that the loan is necessary due to economic uncertainty.
On Thursday, the SBA said that businesses that borrowed less than $2M are considered to have made the certification in good faith and will not be subject to additional scrutiny. Many businesses had worried that they would face an audit and ultimately penalties if they could not prove that other sources of liquidity were unavailable to them.
Companies that received loans above $2M, however, will be subject to further review by the SBA.
In addition, the SBA also announced that companies considering returning their loans can refund the money by May 18.
Last week, FundNews reported on the PPP’s sudden drop in popularity. Read more here.
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