LATEST UPDATE - April 3, 2020

In response to the Coronavirus pandemic, the President signed H.R. 748, known as the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act on March 27, 2020. The bill provides more than $2 trillion of aid to individuals and the public and private sector.

Under the Act, a $349 billion Paycheck Protection Program (“PPP”) seeks to provide short term cash-flow through federally guaranteed loans for small businesses impacted by COVID-19. These loans will be administered by the Small Business Administration (“SBA”) through the 7(a) loan program.

Importantly, please note that PPP loans are distinct from the 7(b) SBA economic injury disaster loan (“EIDL”)program that is already available to small businesses, nor may such loans be used for the same purpose. Interested borrowers should evaluate both programs and choose the path that most closely addresses their needs.

Below is a high-level summary of the provisions relating to PPP loans under the CARES Act and the interim final rule released by the SBA on April 2, 2020 (the “Interim Final Rule”), as well as an option to seek emergency advances pursuant to Section 7(b). We expect the U.S. Department of Treasury and the SBA to provide further guidance and regulations on the legislation in the coming days and weeks. Such guidance and regulations will provide further detail on the administration of PPP loans and may materially change the summary below. Businesses are encouraged to seek advice from qualified legal counsel before applying for a PPP loan.

Read the full article here.

Additional Questions? Contact a member of the Haynes and Boone Finance or Corporate Practice Groups at Haynes and Boone, including the following individuals:

Paul Amiel (Partner, Finance): [email protected]

Jim Markus (Partner, Finance): [email protected]

Alex Grishman (Partner, Finance): [email protected]

Brent Beckert (Associate, Corporate Law): [email protected]

Rachael Apfel (Associate, Corporate Law): [email protected]

Daniel Wei (Associate, Finance): [email protected]

Haynes and Boone, LLP provides this information as a service to clients and the community for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.