- Interim Final Rule: PPP loan forgiveness for small borrowers under $50,000
- Clarification for outstanding PPP loans during changes of ownership
October 7: The Small Business Administration (SBA) and Department of the Treasury earlier this month issued an Interim Final Rule (IFR) clarifying guidance on PPP loan forgiveness. The IFR confirms that small businesses accepting $50,000 or less in PPP loan money will have access to a simplified forgiveness application process with a high probability of receiving full forgiveness for qualified expenses. Affiliated companies with combined loans totaling over $2 million are not eligible for this new guidance.
The SBA has provided a FAQ for lenders and borrowers with more specific details on repayment and forgiveness options.
October 2: The SBA issued an additional notice this month with detailed directions for handling outstanding PPP loans during a change of ownership. The notice provides guidance for all stages of loan repayment & forgiveness during or before ownership changes, acquisitions, merges, etc.
- For satisfied loans (that have been repaid in full or forgiven), no restrictions exist for changes in ownership.
- For remaining unsatisfied loans prior to a change in ownership
- PPP lenders may require certain conditions before granting approval for the change in ownership
- SBA approval for the change in ownership may or may not be required, depending on sales, assets, loan forgiveness, and escrow accounts, among other varying detailed conditions.
For a full break-down of conditions and requirements for merger and acquisition transactions in the COVID-19 economy, call our offices at 516-541-6549 to speak with a qualified professional on our Coronavirus Response Team or check out our DSJCPA COVID-19 Information Center to stay informed.
Associate, Creative Solutions
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