PPP Loans and Change of Ownership Rules

If you are acquiring a business and that business has received a PPP Loan, here is a something you need to know, especially in light of those trying to close by 9/27/###-###-#### If your transaction is to purchase the "assets" of the company and that company has received a PPP Loan, then that amount will be held in escrow at the time of close until such time as that PPP loan is forgiven. Please make sure the Seller understands this. If however your transaction is to purchase the "stock" of the business and that business has received a PPP Loan, then the funds would still be held in escrow BUT the loan MUST be approved by the SBA. This means the transaction needs to go GP (General Program). In order to send the transaction to the SBA, all third party reports and essentially transaction and closing documents need to be supplied with the submission to SBA. Hopes this helps! Bruce