Vorys (Ohio/Texas): Congress Creates the Paycheck Protection Program Through the SBA to Provide Loans and a Loan Forgiveness Program to Eligible Entities Impacted by COVID-19

Phase III of the federal COVID-19 relief legislation—the CARES Act, which President Trump signed into law on March 27, 2020 and is summarized in a previous alert—amends Section 7(a) of the Small Business Act to create the Paycheck Protection Program (PPP).  Under this expansion of the SBA’s traditional loan program, the government will provide or 100% guarantee loans made to eligible persons or entities over the next several months in an effort to help small businesses impacted by COVID-19.  The CARES Act also creates a loan forgiveness program for certain payments made with the PPP loans.  This alert provides answers to some of the preliminary questions a potential borrower might be asking as they consider applying for a loan under the PPP. MORE.

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