This notice provides information concerning required procedures for changes of ownership of an entity that received Paycheck Protection Program (PPP) funds. On Oct. 2, 2020, the Small Business Administration (SBA) issued a Procedural Notice changing the rules regarding when and how the SBA defines a “change of ownership” event. Like most government programs, SBA loan programs have plenty of rules. This document explains that businesses are not eligible for SBA assistance if “Located in a foreign … If foreign ownership was prohibited, wouldn’t the SBA eventually say so? Applicable affiliation rules … The SBA goes on to state that prior to its 8/24 Rule, its position was that any individual who had held any interest in a borrower was deemed to be an “owner”: “There is no exception in the rule based on the owner-employee’s percentage ownership”. A U.S. subsidiary of a foreign-owned company may qualify for CARES Act loan programs. Finally, there’s the SBA’s Standard Operating Procedure (SOP) 50 10, Subpart B, Chapter 2. UPDATED: March 31, 2020: According to the U.S. Treasury, small businesses can apply for Paycheck Protection Program (PPP) loans through existing SBA lenders starting April 3, 2020.Other lenders may apply to the SBA to be included as an approved lender starting April 10, 2020. SBA loans can be a great way to finance a small business acquisition. We support America's small businesses. Business concerns seeking to qualify as a “small business concern” under section 3 of the Small Business Act (15 U.S.C. U.S. companies with foreign ownership may be eligible for both the PPP and EIDL government loan programs, depending on corporate structuring. The historical SBA affiliation rules do not necessarily apply to PPP and other CARES Act loan eligibility. EIDL eligibility counts employees of all affiliated companies, whether U.S. or non-U.S., toward the general 500 cap. In this post, I summarize the highlights of the rules for SBA 7(a) business acquisition loans. Recently published FAQs provide additional clarity that foreign-owned companies may want to consider, even if their loan application was already rejected. The SBA provides very specific Change of Ownership Requirements, which can be found in revised SOP 50 10 5(J), effective January 1, 2018.. - According to SBA’s guide to size and affiliation rules, when calculating the size of your business, you must include the annual receipts and employees of your domestic and foreign affiliates, regardless of whether the affiliates are organized for profit. 632) on the basis of the employee-based size standard must do the same. There are three key sources of information about SBA loan rules: the U.S. Code of […] An applicant must count all of its employees and the employees of its U.S. and foreign affiliates, unless they have an exception to the affiliation rules. 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