Morgan Lewis lawyers Matthew Edward Schernecke and Andrew Rocks spoke with Tax Notes about the Small Business Administration’s (SBA’s) new guidance for the Paycheck Protection Program (PPP) and its implications on merger and acquisition deals involving businesses that had received a PPP loan. “With millions of PPP loans outstanding, the procedural notice provides greater clarity for participants in M&A transactions seeking to preserve the forgiveness of the loan” said Matthew. SBA’s notice extends the definition of change of ownership to include asset sales. According to Andrew, “It’s clear with the notice that unless the seller/borrower is through the forgiveness period - that is, has spent the loan proceeds — and filed for forgiveness, SBA preapproval is required.”
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