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ARTICLE · 17 DECEMBER 2020

SBA Issues Clarifying Guidance For PPP Borrowers In M&A Transactions

Haynes and Boone, L.L.P.
Haynes and Boone, L.L.P.
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Haynes and Boone, L.L.P.

Haynes and Boone, L.L.P.

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The SBA released a Procedural Notice to Paycheck Protection Program lenders on October 2, 2020, providing preliminary guidance for lenders in evaluating requests from borrowers who are navigating potential change of control transactions.

United StatesFinance and Banking
Paul H. Amiel
Paul H. Amiel
Brent Beckert
Brent Beckert
Rob Atras
Rob Atras

The Small Business Administration ("SBA") released a Procedural Notice to Paycheck Protection Program ("PPP") lenders on October 2, 2020, providing preliminary guidance for lenders in evaluating requests from borrowers who are navigating potential change of control transactions.

Some SBA requirements apply to all change of ownership transactions, while others depend on the circumstances of the change of ownership and the status of the PPP loan. The required procedures vary depending on the circumstances of the change of ownership and the status of the PPP loan.

Notice to the Lender is Required.

Prior to the closing of any change of ownership transaction, a PPP borrower must provide its PPP lender with written notice of the contemplated transaction as well as a copy of the proposed agreements or documents that would effectuate the proposed transaction.

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