Can Chapter 11 Debtors Receive PPP Loans?

    View Author April 2020

    To date, the Paycheck Protection Program (PPP) has made up to US$670 billion in loans available to businesses, much of which will ultimately be forgiven by the Small Business Administration.  However, one uncertainty looms for many statutorily eligible businesses that are applying for PPP loans: how will their pending bankruptcy affect their loan application? This client alert examines the SBA’s exclusion of debtors from the PPP program and a recent decision from a bankruptcy court that temporarily enjoined the SBA from excluding a PPP applicant on the basis of its status as a bankruptcy debtor.