Following the rapid spread of COVID-19, the U.S. Congress passed the CARES Act, which allocated an unprecedented amount of federal aid to assist American citizens, businesses and local governments. One foundational element of the CARES Act was the Paycheck Protection Program (PPP), which provided forgivable loans to qualified businesses.
Although mergers stalled at the start of the coronavirus pandemic, the market is beginning to pick up, and many businesses that obtained PPP loans earlier this year have regained their appeal as acquisition targets. Much Corporate & Finance attorneys Mike Shaw and Peter Shepard discuss transaction structures and considerations that sellers should take into account if they want to protect their ability to obtain PPP loan forgiveness in Law360.