Preparing for Business Acquisitions with PPP Loans

Many Latin entrepreneurs create holding companies in the United States, and many such companies have taken advantage of the US government’s Paycheck Protection Program (“PPP”) as well as the US Small Business Administration’s (“SBA”) Economic Injury Disaster Loan (“EIDL”) program. The PPP and EIDL programs are liabilities of a company’s balance sheet. PPP loans are eligible for forgiveness under certain circumstances, while the EIDL are generally low interest, 30-year loans. These U.S. government economic stimulus programs raise various issues for potential acquirors that all entrepreneurs, whether selling or acquiring a U.S. based company, should keep in mind. Working with knowledgable counsel is the best way to ensure that this doesn't trip up your planned transactions. Read my discussion of this matter here.