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Vol. XIX, Issue 23

April 30, 2020

CARES Act Update—SBA PPP Loans

Last night (April 29, 2020) the Department of Treasury (Treasury) added official guidance to its rolling set of FAQs about the CARES Act Small Business Administration (SBA) Paycheck Protection Program (PPP) loans. The new FAQ #39 formalizes Secretary Mnuchin’s public statement earlier this week that the SBA would review loan forgiveness requests for any PPP loan over $2 million.

39. Question: Will SBA review individual PPP loan files?
  Answer: Yes. In FAQ #31, SBA reminded all borrowers of an important certification required to obtain a PPP loan. 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.

The developing scrutiny around PPP loans is a reminder to loan recipients to maintain clear records of the appropriate use of the funds. Forthcoming guidance from SBA and Treasury regarding PPP loan forgiveness will be important for this and other reasons, and Wespath will work to keep its stakeholders informed as it emerges.

As you may have read, some larger businesses are returning PPP funds after having evaluated their certification of need for the loan. Last week Treasury issued regulatory guidance creating a safe harbor for return of such funds. For borrowers that determine, in retrospect, that their loans may not have been necessary, the SBA and Treasury are allowing such borrowers to return loan funds on or before May 7, 2020. The SBA and Treasury will deem borrowers that return funds by May 7, 2020, to have made the certification regarding need in good faith. This safe harbor may also provide borrowers with an opportunity to further evaluate their circumstances and bases for eligibility. It is up to each borrower to determine the need for the loan based on its facts and circumstances and current economic uncertainty.

Weekly Updates to Participants

This week's participant e-blast communication, sent today (April 30) highlights Wespath resources to deal with stress during these times of difficulty and CARES Act updates regarding Required Minimum Distributions and Coronavirus-Related Distributions. Click here to view the e-blast communication. HealthFlex information is only sent to those participants in HealthFlex.

Save the Dates: HealthFlex Plan Sponsor Call and Actuarial Update

Please save the date for the following meetings. We will provide login information closer to the date of each online meeting:

• A HealthFlex Plan Sponsor call will be held Thursday, May 14, from 2:30 to 4:00 p.m., Central Time.

• An Actuarial Update is scheduled for Thursday, May 21, from 12:30 to 2:30 p.m., Central Time.

Both calls will be recorded and shared for those who are not able to attend.

Quarterly Investments Webinar Recording Available

Thank you to those who joined us last week for our quarterly investments webinar. If you were unable to attend the webinar, or wish to share the session with your colleagues, a recording is now available.

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