On December 27, 2020, as part of a larger government funding bill, President Donald J. Trump signed into law the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Act”). The Act, among other things, restarts the Paycheck Protection Program (“PPP”), as administered by the Small Business Administration (“SBA”), provides borrowers with greater flexibility in using PPP loan proceeds and expands the types of expenses eligible for loan forgiveness. The following is a summary of these provisions; however, please note that the SBA is required to issue implementing regulations by January 6, 2020 and we expect further guidance on the Act’s provisions at that time.Continue Reading It’s Back: Paycheck Protection Program 2.0
Paycheck Protection Program
PPP Update: SBA Issues Guidance on M&A Transactions
On October 2, 2020, the Small Business Administration (the “SBA”) issued a procedural notice (the “Notice”) detailing the requirements for an entity (a “PPP Borrower”) that received a Paycheck Protection Program (“PPP”) loan (“PPP Loan”) to enter into a change of ownership/sale transaction without defaulting on such loan. The Notice provides much needed guidance, particularly in light of months of delays in the PPP Loan forgiveness process. A brief summary of the Notice’s requirements is provided below. Click here to download the Notice for more detailed information.Continue Reading PPP Update: SBA Issues Guidance on M&A Transactions
SBA Announces Procedure for PPP Lenders to Collect Loan Processing Fees
On May 21, 2020, the U.S. Small Business Administration (“SBA”) released a notice informing lenders of how they may collect loan processing fees for eligible loans issued under the Paycheck Protection Program (“PPP”).
Pursuant to the CARES Act and the Interim Rule, issued by the SBA on April 2, 2020, the SBA will pay fees to lenders for processing eligible PPP loans at the following rates, based on the balance of the loan outstanding at the time of full disbursement:
- 5% for loans under $350,000;
- 3% for loans between $350,000 and $2 million; and
- 1% for loans over $2 million.
However, in order to collect the processing fee on a PPP loan, a lender must first report to the SBA that a loan has been fully disbursed using SBA Form 1502. The SBA will begin accepting these reports on fully disbursed PPP loans on May 22, 2020. Once the report is received, the SBA will initiate the process of paying the PPP processing fee for which the lender is eligible.Continue Reading SBA Announces Procedure for PPP Lenders to Collect Loan Processing Fees