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On December 27, 2020 the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) was signed into law, which reopened the Paycheck Protection Program (PPP) both to first-time borrowers and, subject to stricter conditions and limits, to borrowers that previously received a PPP loan (second draw borrowers).
[1] Under the Economic Aid Act, the last day to apply for and receive a loan under the reopened PPP is March 31, 2021. The Small Business Administration (SBA) and the Department of the Treasury (Treasury) have recently issued various interim final rules, borrower and lender application forms, and other guidance in connection with the reopened PPP.
Wednesday, December 30, 2020
The Eleventh Circuit recently affirmed the U.S. Small Business Administration’s (“SBA”) rule that makes bankruptcy debtors ineligible for a Payment Protection Program (“PPP”) loan under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). In its comprehensive opinion, the Eleventh Circuit determined that the SBA’s rule is not an unreasonable interpretation of the CARES Act and is not arbitrary and capricious.
1 The Eleventh Circuit joins the Fifth Circuit, which similarly held in June 2020 that a bankruptcy court exceeded its authority when it required the SBA to make a PPP loan available to a debtor in bankruptcy.