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An Injury Lawyer's Take on PPP Loan Certification

Posted by Joshua R. Evans | May 14, 2020 | 0 Comments

Below is the language released May 13, 2020 by the government.

Earlier I released a video warning small businesses of the potential for fraud charges stemming from the ambiguous PPP Loan certification process. In response to so many professionals scratching their heads over who qualifies for the PPP Loan and who is a fraudster, the government extended the deadline- to today. Unfortunately for every small business owner, the government hasn't provided much more guidance on who is a fraudster and who is certified in good faith. All we really know for sure is today is the day to give the money back under this safe harbor rule. I don't know if the idea was to scare businesses who don't need the money into giving it back or just scare everyone. While lawyers and accountants are scratching their heads on advice to give clients, we do know there is a threshold that will receive higher scrutiny.

The government is going scrutinize any loan over $2 million. That is not to say that smaller loans won't be examined. The government has created a tremendous grey area for businesses who accepted PPP Loans. It sounds like each financial position and available means of credit, could be on the table for the government to review. Certainly, the larger the loan the more scrutiny.

The guidance for small businesses with funding under $2 million is scant, but what we do know is your ability to receive financing or other forms of liquidity is something that will be considered. From everything I have seen and heard, this is going to be a case by case consideration by the government.

So what can you do to protect yourself. I would suggest keeping good records during this process and note any challenges facing your business. Drop in leads or potential customer calls, reduced revenue, increases in staff absences. Things that might not show on your books. Talk to your accountant and perhaps a good lawyer.

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Joshua R. Evans

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