Coronavirus Impact Updates

Showing 3 posts from October 2020.

SBA Releases Interim Final Rule for PPP Loans of $50,000 or less

Posted In Coronavirus

Coronavirus

The Small Business Administration (SBA) recently released an Interim Rule that primarily affects sole proprietors.

There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans. Approximately 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees (presumably not counting the owner as an employee) or one employee.

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President Trump’s Payroll Tax Deferral Order

Posted In Coronavirus

Coronavirus

On August 8, 2020, President Trump issued a Presidential Memorandum and Executive Order whereby the President directed the Secretary of the Treasury to allow for the deferral of the employee-portion of payroll taxes withheld under IRC Section 3101(a) (6.2% for Old-Age, Survivors and Disability Insurance) on wages earned during the period of September 1, 2020 through December 31, 2020 (“Deferral Order”).

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PPP Loans and Changes of Ownership: Considerations for M&A Transactions

Coronavirus

On October 2, 2020, the Small Business Administration (SBA) issued a Procedural Notice to provide information concerning required procedures for a “change in ownership” of an entity that has received a paycheck protection program (PPP) loan.  Prior to issuance of this Procedural Notice, the SBA regulations that govern PPP loans did not expressly address asset acquisitions/sales or even provide a detailed definition of “change of ownership” for borrowers.  Further, while most PPP loan documents required the PPP lender to consent prior to a “change of ownership,” the term “change in ownership” was not defined.  This lack of guidance and undefined language in the PPP loan documents left PPP borrowers who wanted to accomplish an asset acquisition/sale, sale of common stock or ownership or merger at risk of defaulting on their PPP loan covenants, which would require immediate repayment of their PPP loan.

Continue reading PPP Loans and Changes of Ownership: Considerations for M&A Transactions ›

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