Back to basics, continued – Where are we now on the issue of consumer finance companies’ eligibility for PPP loans? | Dentons – Left Bank
Back to basics, continued – Where are we now on the issue of consumer finance companies’ eligibility for PPP loans? | Dentons
Since the adoption of the law on aid, relief and economic security against coronaviruses (CARES law) at the start of the COVID pandemic, a question remains as to the eligibility of consumer credit companies to obtain Paycheck Protection Program (PPP) loans under the law. . The Small Business Administration (SBA), responsible for distributing the dollars under the program, has sent mixed signals on the question of the eligibility of “lenders” to receive such loans and the cancellation of those loans, despite the clear language of the law that “any business enterprise … will be eligible to receive a covered loan.”
Some consumer credit companies have indeed obtained a forgiveness of their PPP loans. However, too many finance companies that have received PPP loans have been denied a discount on the grounds that these finance company lenders were not eligible under the CARES Act, even though they had originally given a loan. And, too often, the bank lenders of our finance companies have raised their hands and thrown in the towel.
There is a strong case to be made that consumer credit companies are Eligible Recipients under the PPP, for covered loans made during the period covered (these are all defined terms). This is especially true if your loan is a so-called “first draw” loan obtained under the CARES Act and not the American Rescue Plan Act of 2021.
An appeal must be filed within 30 days of notification from your bank that your PPP SBA loan has been found ineligible. These notices are out now. So if you want to challenge the SBA’s ineligibility determination, now is the time to lose …