The Small Business Administration (SBA) has made an adjustment to its guidance to provide that entities which have concluded a bankruptcy proceeding are not, for purposes of PPP eligibility, considered in bankruptcy. Entities which are presently in bankruptcy are not eligible for a PPP loan.<\/p>\n
The SBAs latest Frequently Asked Questions (found at https:\/\/www.sba.gov\/sites\/default\/files\/2021-04\/PPP%20FAQs%204.6.21%20FINAL-508.pdf<\/a>) contain a new FAQ Number 67. It provides that for PPP eligibility purposes, a party is deemed to have left a bankruptcy proceeding under the following circumstances:<\/p>\n Chapter 7 the Bankruptcy Court has entered a discharge order.<\/p>\n Chapters 11, 12 and 13 the Bankruptcy Court has entered an order confirming the plan.<\/p>\n Any Chapter the Bankruptcy Court has entered an order dismissing the case.<\/p>\n For an entity to be eligible for a PPP loan, the above orders must be entered before the date of the PPP loan application.<\/p>\n If an entity is permanently closed as a result of a bankruptcy filing, it is not eligible for a PPP loan.<\/p>\n Thus, an entity that has recently resolved its bankruptcy case, and is otherwise eligible for a PPP loan, must submit its application before the May 31 deadline. If an entity is otherwise eligible for a PPP loan and is in a bankruptcy proceeding that can be quickly resolved, it may wish to attempt to do so before the May 31 PPP loan application filing deadline.<\/p>\n <\/p>\n More: <\/p>\n Buchalter COVID-19 Client Alert: PPP Loans Now Available to Otherwise-Eligible Companies That Have Ended Their Bankruptcy Proceedings - JD Supra<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The Small Business Administration (SBA) has made an adjustment to its guidance to provide that entities which have concluded a bankruptcy proceeding are not, for purposes of PPP eligibility, considered in bankruptcy. Entities which are presently in bankruptcy are not eligible for a PPP loan Continue reading