In response to the COVID-19 pandemic, Congress enacted a Paycheck Protection Program (“PPP”) under which businesses adversely impacted by the pandemic may obtain loans from the Small Business Administration (“SBA”) and use the proceeds to pay payroll and certain other operating expenses.  If the businesses use the loan proceeds for approved purposes and satisfy certain other criteria for retaining employees, the loans are forgiven.  If the loans are not forgiven, they must be repaid, albeit at a favorable interest rate.

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Article effective based on date written: May 1, 2020 Takeaway:  Recently implemented rules, public statements of government officials, and the return of funds by some should not compel most businesses to change course; however, recipients of funds from the Paycheck Protection Program should collect and retain documentation to support certifications made with their loan applications,…

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