January 19, 2021

Volume XI, Number 19

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January 18, 2021

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SBA Issues Interim Final Rule Capping Aggregate PPP Loan Amounts at $20M for Single Corporate Groups

The SBA issued an interim final rule (the “Rule”) capping the total amount of PPP loans that a single corporate group can receive. The Rule states that “businesses that are part of a single corporate group shall in no event receive more than $20,000,000 of PPP loans in the aggregate.” Businesses are considered part of a single corporate group if they are “majority owned, directly or indirectly, by a common parent.” The limit is immediately effective for loans that have not been fully disbursed as of April 30, 2020. For loans that have been partially disbursed, this limitation applies to any additional disbursement that would cause the total PPP loans to a single corporate group to exceed $20 million.

An applicant must notify the lender if it has applied for or received PPP loans in excess of amounts allowed, and withdraw or request cancellation of any pending PPP loan application or approved PPP loan that is not in compliance with the limitation. Failure by the applicant to do so will be regarded as a use of PPP funds for unauthorized purposes, and the loan will not be eligible for forgiveness.

Please note that businesses are subject to this limitation even if the businesses are eligible for the waiver-of-affiliation provisions or are otherwise not considered to be affiliates.

See the full text of the Interim Final Rule here.

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© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 121
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About this Author

Phil Feigen of the Polsinelli Law Firm Corporate Transaction Attorney, in Washington DC
Office Managing Partner

Phil Feigen brings a unique perspective to providing general corporate advice, as well as complex business counsel to clients in ever-changing regulatory environments.  For more than 20 years, Phil has been providing guidance with respect to Small Business Investment Companies and other Small Business Administrative regulations, federal and state banking laws and federal securities laws. 

Phil focuses on helping clients through the SBIC licensing process so that they may realize the benefits of the program and increase the amount of investment...

202-626-8330
Sara C. Ainsworth Securities & Corporate Finance Attorney Polsinelli Washington, D.C.
Associate

As an associate in the Securities & Corporate Finance practice, clients rely on Sara Ainsworth to work with Polsinelli’s team of attorneys to analyze each transaction matter to develop a strategic approach to representation based on the client’s immediate and long-term business and operational goals.

Working closely with seasoned Polsinelli attorneys in the Securities & Corporate Finance practice, Sara helps deliver a range of legal services during the life cycle of the client’s business—from selecting the appropriate choice of entity through to exit strategy.  Her practice...

202.772.8495
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