As part of the stimulus packages, they in essence took some SBA appropriations from the 7a loan program. This means that once the PPP loan program is out of money, SBA 7a loans will be done until June 30th. Congress will have to appropriate more funds for the SBA program to move forward for the last quarter. The SBA 7a and 504 loan programs are still active, but few lenders are working on new loans right now. Timing is unknown since few lenders are processing new loans right now. At some point, hopefully soon, that will change. However, at this point there is just not a lot of guidance from the SBA, so what the landscape will look like when we do start to move forward is a bit of an unknown.
If a Seller received PPP, is the Loan Transferable to a Buyer?
SBA has not provided guidance on whether it is transferrable. Some thoughts are that if the SBA would allow the transfer of PPP, the sale would have to be a stock sale for the liability to transfer along with the EIN for the business. At this time, it is believed that the PPP will NOT be transferrable (Asset Sale) and the loan or the forgiveness would be the responsibility of the seller. Again, there has not been guidance from SBA, so these are simply opinions based on historical practices.
Once the country starts to open up, lenders will get back to the business of making loans, but to what extent is an unknown. Some industries could or could not be problematic moving forward (hotels, restaurants, etc.). The biggest unknown is that we can’t really say right now what the plan is or when the plan will be put in place, because we don’t know. But once some degree of normalcy returns, then yes banks will get back to making loans.