U.S. Treasury Secretary Steve Mnuchin has announced that all companies who received over $2 million of Paycheck Protection Program (PPP) funds will have their loans reviewed to make sure that borrowers’ self-certifications for the loans were appropriate. In recent statements Mnuchin re-affirmed the need for companies to prepare solid documentation around both the use of funds and the companies’ evaluation, at the time of application, that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”.
This declaration comes on the heels of the recently released provision that allows companies, by May 7th, to return PPP funds without penalty if they have determined they are not eligible.
The loan review process will commence following the lender’s submission of the borrower’s loan forgiveness application. Subsequent regulatory guidance regarding the reviews will be issued.
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.