October 20, 2021

Volume XI, Number 293

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October 19, 2021

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October 18, 2021

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SBA Releases Procedural Notice for PPP Borrowers Engaging in M&A Transactions

Please note that this alert updates prior publications made by our firm pertaining to the subject matter discussed below.

The SBA recently released a procedural notice for borrowers under the Paycheck Protection Program (PPP) seeking to enter into one or more transactions that will result in a change of ownership. 

The procedural notice defines what constitutes a “change of ownership” and, in the event that a transaction will result in a change of ownership, (a) when SBA approval will be required, and what documentation the SBA will require, and (b) what actions the PPP borrower may take to avoid the necessity of obtaining such SBA approval.   In any case, prior to closing a transaction involving a change of ownership, a PPP borrower must notify its PPP lender in writing of the proposed transaction and provide the PPP lender with a copy of the proposed agreement or other document that would effectuate the proposed transaction. 

The procedural notice also states that there are no restrictions on change of ownership if, prior to closing the sale or transfer, the PPP borrower has (a) repaid the PPP loan in full, or (b) completed the loan forgiveness process.

© Copyright 2021 Sills Cummis & Gross P.C.National Law Review, Volume X, Number 286
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About this Author

Brian A. Haskel Corporate Attorney Sills Cummis & Gross New York, NY
Member

Brian A. Haskel is resident in the Sills Cummis & Gross New York office.  He is a highly experienced corporate attorney, with extensive transactional experience in mergers and acquisitions, securities offerings and counseling on general corporate and securities law matters.  Mr. Haskel advises private equity, venture capital and hedge funds, public and private companies and issuers and underwriters, family offices, domestic and foreign clients.  His experience includes joint ventures, reorganizations, debt restructurings, securities law filings, tender and exchange offers, consent...

(212) 500-1541
Alan E. Sherman Tax & Corporate Attorney Sills Cummis & Gross Newark, NJ
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Alan E. Sherman focuses on the area of tax and corporate planning. Mr. Sherman regularly counsels clients ranging from small business entrepreneurs to Fortune 500 public companies. He brings a unique advantage to clients — an understanding of business and related areas such as real estate and mergers and acquisitions and the application of the tax laws to achieve the maximum benefit. With this perspective, Mr. Sherman is able to suggest creative and practical tax solutions to client problems. He has extensive experience in the area of taxation of partnerships and limited liability...

(973) 643-5959
Jason L. Sobel Real Estate Attorney Sills Cummis & Gross Newark, NJ
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Jason L. Sobel is a Member of the Sills Cummis & Gross Real Estate Department and chairs the Firm’s F.O.R.E. (Family Owned Real Estate) Practice Group.  He primarily counsels retail, industrial, office and residential real estate owners and developers regarding acquisitions, sales, financing, and leasing with respect to their projects.  He also represents several lending institutions in commercial and construction financings as well as a number of clients with respect to retail liquor license transfers and related issues.  Additionally, Mr. Sobel assists different privately-held...

(973) 643-5295
Lori M. Waldron, Sills Cummis Law firm, Emerging Growth Attorney, Stock Acquisition Lawyer
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Lori M. Waldron's practice focuses on the representation of both emerging growth and well-established public and private companies in sophisticated business transactions, with a particular emphasis on the life sciences and biotech industries. Ms. Waldron has extensive experience representing clients through all phases of their business cycles and advising them how to best take advantage of varying business opportunities, whether arising in the ordinary course of business or as an extraordinary matter. Her regular practice includes counseling her clients in connection with start-up...

(973) 643-5158
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