On October 2, 2020, the U.S. Small Business Administration (SBA) released a Procedural Notice providing guidance addressed to Paycheck Protection Program (PPP) lenders and SBA employees as to the circumstances under which prior SBA approval is required before a borrower of a PPP loan undergoes a change of ownership.[1]  In particular, the October 2, 2020 Procedural Notice includes instructions to PPP lenders on how they may address equity or asset M&A transactions, ownership restructurings, or transfers of ownership interests involving their PPP borrowers.  Importantly, the October 2, 2020 Procedural Notice does not clearly address the circumstance of a change of ownership of a PPP borrower resulting from the issuance of additional ownership interests in the PPP borrower.[2]
Continue Reading The October 2, 2020 SBA Procedural Notice: Change of Ownership Transactions Involving PPP Borrowers