Best Practices: PPP Loans to Sole Proprietors, Independent Contractors and Self-Employed Individuals
Paycheck Protection Program (“PPP”) loans are available to sole proprietors, independent contractors and eligible self-employed individuals. In order to qualify for a PPP loan, a sole proprietor, independent contractor or eligible self-employed individual must “submit such documentation as is necessary to establish such individual as eligible, including payroll tax filings reported to the Internal Revenue ... Read More
Best Practices: The Paycheck Protection Program and its Impact on Small Business Change-in-Ownership Transactions
On April 29th, 2020, the SBA and the Department of Treasury issued additional guidance regarding the eligibility of loans to businesses which were acquired via a change in ownership transaction occurring after February 15th, 2020. Section 1102 of the CARES Act provides that PPP loans are available only to applicants that were “in operation on ... Read More
Best Practices: Don’t Get Ahead of Yourself: PPP Audits May Be Key Precursors to Applying For Forgiveness
As we move through the second round of Paycheck Protection Program (“PPP”) approvals and disbursements, recent developments remind lenders and borrowers that forgiveness may not be guaranteed, and lenders have been left to wonder what exactly should be the scope of their loan forgiveness review for PPP loan files. On April 28, 2020, Treasury Secretary ... Read More
Best Practices: Underwriting the PPP Loan to a “Forgiveness Standard.”
The Paycheck Protection Program (“PPP”) has been a challenge for many SBA lenders, both in terms of the speed with which it has necessarily been implemented as well as the significant changes in its requirements from standard SBA 7(a) loans. SBA Lenders have been processing PPP guidance that has been changing on a daily, and ... Read More
Best Practices: Paycheck Protection Program Loan Forgiveness: What We Know, What We Need To Find Out
Now that the first wave of Paycheck Protection Program (“PPP”) loans have been approved and are being funded, Lenders’ and Borrowers’ attention have turned to Section 1106 of the CARES Act (Pub.L. 116-136), Loan Forgiveness. According to the statute, Borrowers will be eligible for forgiveness of indebtedness on a PPP loan in an amount equal ... Read More
Best Practices: Who is an Authorized Representative under the Paycheck Protection Program?
While the CARES Act, the First PPP Interim Final Rule and guidance issued by the U.S. Treasury and U.S. Small Business Administration repeatedly state that lenders may rely on representations made by the borrower’s authorized representative, this term is not defined in the enabling legislation, implementing rules and regulations, or formal written guidance. Particularly troubling ... Read More
