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SBA, Treasury Extend Safe Harbor to Return PPP Funds, and New Guidelines for International Businesses

Updated May 14, 2020

AAFCPAs would like to make clients aware that in their recent Frequently Asked Questions for Lenders and Borrowers, the Treasury and the Small Business Administration announced an additional extension of the “safe harbor” deadline for recipients of Paycheck Protection Provision (PPP) loans. PPP loan borrowers are now allowed to return the money to the government by May 18th, 2020 if the companies determine they do not meet guidelines for eligibility. This date was extended from May 14th by the SBA in an FAQs document released on May 13th, 2020.

Changes to SBA’s Affiliation Rules

Additionally, the May 5th FAQs clarify how the SBA’s affiliation rules apply with regard to counting the employees of foreign and U.S. affiliates. “For purposes of the PPP’s 500 or fewer employee size standard, an applicant must count all of its employees and the employees of its U.S and foreign affiliates, absent a waiver of or an exception to the affiliation rules. 13 C.F.R. 121.301(f)(6).  Business concerns seeking to qualify as a “small business concern” under section 3 of the Small Business Act (15 U.S.C. 632) on the basis of the employee-based size standard must do the same.”

AAFCPAs reminds clients to document your rationale for the PPP loan application based upon facts and circumstances at the time of the application as well as your discovery of subsequent information in line with the most recent guidance. We have provided sample questions borrowers should address in a written “living document” supporting that PPP loan certifications were made in good faith.

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If you have any questions, please contact Dan Stanhope, CPA, at 774.512.4134, dstanhope@nullaafcpa.com; Brittany Besler, MBA, CPA, Esq. at 774.512.9001, bbesler@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Daniel Stanhope CPA, MSA
Dan leads high-energy engagement teams in providing assurance solutions to clients across a wide variety of privately-held, commercial industries, including: Construction, Cannabis, Manufacturing & Distribution, Professional Services, Architecture & Engineering, and Insurance. He offers detailed reports about audit findings and communicates business-critical information to management, positively impacting their decision making.
Brittany Besler
Brittany possesses a unique combination of tax, legal, and business backgrounds, and is a valuable member of AAFCPAs’ Tax practice. She provides tax planning, research, and compliance solutions for corporations, partnerships, nonprofits, individuals, estates & trusts. Brittany advises businesses and individuals on various federal, state, local and foreign tax-related issues, including counseling clients on the consequences of new and updated tax laws. She assists clients in the creation of appropriate and optimal organizational structures, and advises on tax planning and tax exemption compliance. She advises newly-formed and well-established nonprofit clients on meeting compliance requirements of various government agencies, including the IRS rules on fundraising and political activities.