Treasury Department Announces Safe Harbor for PPP Borrowers with Loans of Under $2 Million

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The Treasury Department announced new guidelines that relate to the “economic necessity” requirement for Paycheck Protection Program loans. Differing from the original guidelines, the updated guidelines appear to indicate that the Treasury Department, as a matter of administrative policy, will not subject a PPP borrower with a loan amount of under $2 million to an audit to determine whether that borrower’s certification of “economic necessity” contained in its loan application was made in good faith. This instruction is materially different from prior guidelines on the subject.

Matt Mitchell and Scott Bleier outline the change in our COVID-19 Alert.