Banking & Finance Law Report

Archives: SBA Loans

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SBA issues two more borrower-friendly PPP forgiveness applications

The Small Business Administration (SBA) has issued two new borrower-friendly Paycheck Protection Program (PPP) forgiveness applications: the EZ Application and a revised Forgiveness Application. The changes come in response to the recent passage of the Paycheck Protection Program Flexibility Act as well as pressure to simplify the forgiveness process for borrowers. My colleagues Jack Beeler, Jack Meadows and Cat Rice explain the two new options and additional changes to the forgiveness program in this Porter Wright Law Alert.

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Paycheck protection: Lender considerations before round two

Lenders are getting some much-deserved rest after enduring nearly two weeks of processing applications for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), which ran out of funds in the early hours of Thursday, April 15 – tax day. The program has been sharply criticized by lenders and borrowers alike, citing confusing guidance and technological glitches with the SBA e-Trans system, to the overwhelming sense that the program was underfunded and biased given the expanded eligibility criteria.…

UPDATE: SBA loan eligibility FAQs

Certain government programs, including SBA loan programs, are reserved for “small businesses.” In order to qualify for those programs, a business must satisfy both the SBA’s definition of a “small business concern” as well as the size standards for a small business. My colleague Jack Meadows offers answers to some frequently asked questions in this Employee Benefits blog post.

New Statute Makes It Easier for the Small Business Administration to Lend to ESOPs

Every business owner must make a decision regarding what he or she will do with the business. If no family member is able or willing to assume ownership, an increasingly popular succession planning strategy has been to sell the business to an employee stock ownership plan (“ESOP”).  ESOPs are popular in part because of the tax advantages they provide to the selling business owner, the company, and the employees.  Smaller businesses who have considered adopting an ESOP, however, sometimes have faced challenges securing financing on acceptable terms.  That could occur if the business’s assets (both tangible and intangible) did not provide sufficient collateral.  Further, the Small Business Administration (the “SBA”) 7(a) Loan Guaranty Program often was of little help because Section 7(a) of the Small Business Act did not reflect modern ESOP loan practices.

The SBA hurdle just became easier to overcome with the Main Street Employee Ownership Act (the “Act”), which was signed into law as part of the 2019 National Defense Authorization Act. The Act should improve SBA lending to ESOPs in the following ways:…

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