SBA Muddies The Waters By Issuing Complicated Reporting Requirements For Ownership Changes Of A PPP Borrower

COVID-19 Resource

The Small Business Administration (SBA) released a Procedural Notice that establishes an approval process for transactions that result in a change in ownership of a paycheck protection program (PPP) borrower. The guidance is relatively clear, but comes very late in the PPP cycle and unnecessarily creates many obstacles and questions. More specifically:   

• With an effective date of October 2, the Procedural Notice does not address the many transactions that have already occurred (or those occurring on or already in process after the effective date).  
• Given the widespread use of PPP loans, the likelihood that most loans will be substantially forgiven and the overall purpose of helping businesses, the new obstacles created by the SBA for change-of-ownership transactions are unnecessary and counterproductive.