In June and December of 2020, we stated that the Fifth and Eleventh Circuits had held that the Small Business management (“SBA”) may exclude debtors in bankruptcy from consideration for Paycheck Protection Program (“PPP”) loans, albeit for differing reasons. The current Consolidated Appropriations Act, 2021 (“CAA”), signed into legislation on December 27, 2020, might have changed that. It includes conditions that offer some debtors with use of the system, however with a catch: these conditions try not to just simply simply take impact through to the SBA provides its blessing in writing. The SBA hasn’t supplied its written blessing. Instead, this has expressly stated with its Interim Final Rule concerning the company Loan Program Temporary modifications; Paycheck Protection Program as Amended by Economic help Act that debtors in bankruptcy usually do not be eligible for a PPP loans. IFR, Section c that is b.2( (pages 26-27). The PPP that is additional lending CAA will expire on March 31
The PPP was a component that is central of CARES Act. Through August of 2020, the PPP permitted qualified businesses that are small obtain guaranteed in full loans to pay for particular costs, such as for instance payroll expenses, lease, and resources. The SBA took the position that they are not although the CARES Act did not discuss whether companies who have filed for bankruptcy protection are eligible to participate in the PPP. Continue reading Congress licenses SBA in order to make PPP Loans to Debtors in Bankruptcy, SBA claims “No”. The CAA contains conditions which could alter that.