Over the past several weeks, there have been many discussions on the Payroll Protection Program loans and some of the underlying rules related to the certifications needed to justify obtaining these loans. Today, the Department of the Treasury added an additional question and answer to its Frequently Asked Questions.
Effectively, for businesses who obtained loans under $2,000,000, no further justification for borrowing will be needed as the smaller loan demonstrates a limited ability to obtain capital elsewhere. For loans over $2,000,000, the SBA still intends on reviewing these loans and will disallow loan forgiveness if the borrower did not have sufficient basis for obtaining in the first place. Additionally guidance is anticipated in the near future on these matters.
If you any questions or concerns, please contact your tax advisor.