Paycheck Protection Program
Follow-Up Information

Updated Friday, May 15, 2020

Deadline Extension - The Treasury and SBA have indicated that prior certification as to eligibility will be deemed to have been made in good faith if you repay your PPP loan in full by May 18, 2020 (formerly May 14, 2020).

New Guidance and Increased Scrutiny on PPP Loans 

    The SBA and Treasury released important new guidance that relates to PPP loans, applications and certifications.  For more detailed information, please refer to the Treasury website by clicking here PPP FAQs

    Borrowers will likely be required to make the same eligibility certifications for funded  PPP loans as a condition of forgiveness.

    The new guidance clarifies the “current economic uncertainty” requirement that borrowers must meet to apply for a loan. In view of the new guidance, we would like to remind you:

    1. When you applied you certified that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
      Also, upon reviewing the new guidance (set forth below)
    2. You have the opportunity to withdraw your application if you do not feel you meet this criteria.
    3. If you’ve already been funded, and you believe you do not meet this criteria, you can repay your loan by May 14, 2020 and the SBA will treat that repayment as being in good faith.

    Here is the additional eligibility information provided by the U.S. Department of the Treasury (Treasury) and/or the Small Business Administration for Paycheck Protection Program (PPP) loans:

    • Businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations are not eligible for PPP loans.

    Please read the information below in its entirety and, if necessary, consult with your counsel or advisor before you make any decisions.

    Question: Do businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

    Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers 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. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.

    Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification in good faith.

    Please remember that you also certified you understood that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.

    The Treasury, SBA and the media have been focused on PPP loans and issues around borrower eligibility.

    Question: Will the SBA review individual PPP loan files?

    Answer: Yes. the 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 outcome of the SBA’s review of loan files will not affect the SBA’s guarantee of any loan for which the lender complied with the lender obligations set forth in paragraphs III.3.b(i)-(iii) of the Paycheck Protection Program Rule (April 2, 2020) and further explained in FAQ #1.15

    The Treasury and SBA have indicated that prior certification as to eligibility will be deemed to have been made in good faith if you repay your PPP loan in full by May 18, 2020.

    HOW TO PROCEED IF - 

    1. You've actually received the PPP funds in your bank account and now feel you may not be eligible or want to return the funds,
      Please email us at CaresLoanRequests@AmericanRiverBank.com and include:
    • “Re-payment” in the subject line
    • Business Name in the email
    • Best number to reach you in the email 
    1. You've been approved but:
    • not yet received the PPP funds in your account and now feel you may not be eligible or want to return the funds.
    • not yet completed the last few steps of the PPP fund process and now feel you may not be eligible or want to return the funds.
    • not yet been approved and wish to withdraw your pending application.

    Please email us at CaresLoanRequests@AmericanRiverBank.com and include

    • “Withdraw” in the subject line
    • Business Name in the email
    • Best number to reach you in the email

    Links to additional information you may find helpful

    For the most up to date information on all PPP loans visit the Small Business Administration website at www.sba.gov.


    Please continue to check our website for updates.