PPP and Changes of Ownership Update 10/2/2020
by John Vitale, MBA
Commercial Relationship Manager
Midland States Bank
The SBA has extended its notice on required procedures when it comes to changes of ownership and outstanding PPP loans.
In essence, if someone plans to sell their business and has an outstanding PPP loan that hasn’t been forgiven, that loan does not transfer to the new owner. In most cases, funds covering the PPP loan will have to be set aside from the sale proceeds in an escrow account until forgiven.
If you are considering using an SBA loan to fund a business purchase, be sure to check out SBA’s updated notice:
SBA Procedural Notice: Paycheck Protection Program Loans and Changes of Ownership