If you are thinking of selling or transferring ownership of your business, make sure to contact your Payroll Protection Program (PPP) lender before you do.
If you received a PPP loan and the loan has not yet been forgiven, your PPP lender (and in some cases, the Small Business Administration (SBA)) must review and approve the sale or transfer before the deal closes. This requirement is triggered for all (a) transfers of 20% or more of the common stock or units in the company; (b) transfers of at least 50% of the business’ assets; and any time (c) the business entity is merged with another entity.
The information the PPP lender (and SBA) will need depends on the type of business sale or asset transfer. More details are available in this SBA Procedural Notice. Contact HLG if you need assistance with this or other business sale and transfer details.