On Friday, October 2, the Small Business Administration (SBA) issued a procedural notice regarding “Paycheck Protection Program Loans and Changes of Ownership.”
As part of the CARES Act, the Paycheck Protection Program (PPP) provided relief to small businesses in need of stimulus funding in the wake of the COVID-19 pandemic.
Over five million loans from over five thousand companies representing more than $525 billion were approved with the expectation that most of that funding would be forgiven if companies can demonstrate that it was spent over a 24-week period on payroll and a few other approved expenses.
With so many individual companies participating, it is unsurprising that many of them are working through ownership changes before their loan forgiveness determination can be made.
In issuing additional guidance, the SBA has clarified the following for loan recipients as we begin the fourth quarter of 2020:
The SBA has outlined how owners should submit prior approval requests for changes in ownership for PPP loan recipients and will make a determination within 60 calendars days.
For all the latest resources and insights to help your business navigate the changes caused by the coronavirus pandemic, check out our COVID-19 Resource Hub.