The SBA has extended the Safe Harbor Period to return PPP funds if deemed by the company and its board as necessary to May 14th; as always we’ve advocated for intentional and deliberate discussions with your boards on any PPP that you might be applying for or taking.
As the additional $310B was authorized under the Paycheck Protection Program (PPP) late last week additional interim final rules were put into place, clarifying that portfolio companies of private equity funds are indeed eligible to receive PPP loans. As communicated before, we stress the importance of implementing a diligent deliberation process as to how the funds will be used, confirming that you are clear of affiliation issues, and given the potential for audits carefully track the use of funds.
It turns out that large public companies and hedge funds do not make for the best matches with that intent, and yet a good number have received tens of millions. Harvard and Princeton also received big dollars but returned allocations of government relief.
Another week and more PPP drama. Congress and the White House approved another $310B to refill the CARES Act coffers and hoping that this second wave better matches the original congressional intent to get money into the hands of those businesses most impacted (e.g. forced to close by government directive) and those workers most impacted (in my view hourly workers).
Just yesterday morning, the SBA announced that they have reached their funding limit and will not be accepting new applications for the Paycheck Protection Program. There has been a push from Congress to increase the amount available and we do anticipate this will occur shortly. We are also working with our legal team, experts and advisors who are tracking and analyzing what the case may be for applications that have already been submitted, but not yet processed, and will share that update as soon as it becomes available.