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On October 2, 2020, the U.S. Small Business Administration (the “SBA”) issued Procedural Notice (5000-20057), titled “
Paycheck Protection Program Loans and Changes of Ownership” (the “Notice”). The Notice sets forth the steps that must be taken when the recipient of a Paycheck Protection Program ( PPP ) loan intends to engage in a transaction considered by the Notice to be a change of ownership.
Although continuing to leave some questions unanswered, the Notice provided much-needed guidance to PPP borrowers and lenders, acquirers and M&A practitioners at a critical time for M&A activity. This article provides a refresher of the Notice, as originally summarized in a Lathrop GPM legal alert on October 14, 2020 by Business Transactions Practice Group members Bill Klein and Daryn McBeth, and considerations for PPP borrowers that are considering or in the process of a change of ownership.
Tuesday, December 15, 2020
SBA and U.S. Treasury Issue Additional Guidance for Businesses Applying for Loan Forgiveness
For those who received loans as part of the Paycheck Protection Program (PPP), this past October and November marked the end of the 24-week covered period. Over the last several weeks, the Small Business Administration (SBA) along with the U.S. Treasury Department have issued additional guidance and clarification surrounding the forgiveness process and the forgiveness application.
This update is intended to highlight key guidance areas issued recently to help borrowers with their forgiveness applications. As with other aspects of the PPP, guidance on the forgiveness portion of the PPP is constantly evolving and additional information may become available.
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