The U.S. Department of Treasury issued a new version of its PPP FAQ this morning. Included was a new question related to the eligibility of businesses owned by “large companies with adequate sources of liquidity to support the business’s ongoing operations.” The FAQ highlighted that borrowers must not only review applicable affiliation rules to determine eligibility, but also assess their economic need for the PPP.

The FAQ clarifies that when borrowers make the certification related to needing the loan that they must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. Additionally, the FAQ noted that a public company with a substantial market value and access to capital markets would be unlikely to make such a certification. 

Any borrowers that applied for a PPP loan prior to the issuance of this guidance (April 23) and repays the loan by May 7, 2020 will be deemed to have made the certification in good faith.

The full FAQ is available here.