On April 28, the Department of the Treasury and the Small Business Administration announced all Paycheck Protection Program loans exceeding $2 million will be audited by the government. Established by the federal CARES Act, the PPP provides potentially forgivable loans to small businesses affected by the COVID-19 pandemic.
The Treasury Department and SBA followed this announcement by adding Question 39 to its FAQ guidance document. The answer to the question notes to “further ensure PPP loans are limited to eligible borrowers in need, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application. Additional guidance implementing this procedure will be forthcoming.” View the FAQ document.
NRCA urges members who have gotten a PPP loan or who are still applying for a PPP loan to regularly check for updated guidance from the Treasury Department and SBA by reviewing these guidance documents.
NRCA notes funding still is available for the PPP. As of May 1, roughly $175 billion of the $310 billion in new funding of the PPP loans provided by Congress in April had been allocated to 2.2 million applicants. The average loan amount in this new tranche of funding is $79,000 compared with the average loan of $206,000 provided by the first installment under the CARES Act. This second round of $310 billion of PPP funding included $60 billion specifically targeted for smaller banks in efforts to help smaller businesses access the program.
