Navigating Paycheck Protection Program Loans in M&A Deals
Understand key transaction structure and timing considerations associated with an M&A transaction when there has been an accepted PPP loan.
Since a large number of companies have applied for and received Paycheck Protection Program (PPP) loans during the COVID-19 crisis, many M&A transactions undertaken in 2021 will involve a target with an outstanding or recently forgiven PPP loan. A PPP loan raises a number of issues for consideration in an M&A transaction, ranging from transaction structure and timing considerations to specific topics for due diligence, new purchase price points to be negotiated, and the impact of key provisions of the purchase agreement. This material will provide M&A participants with background on the PPP program, an understanding of the key timing, consent, and transaction structure considerations raised by PPP loans, and the knowledge to issue spot and negotiate new purchase agreement points.
• You will be able to describe the main components of the Paycheck Protection Program, including eligibility and forgiveness requirements.
• You will be able to identify key areas of focus for the purchase agreement in an M&A transaction where the target has accepted a PPP loan.
• You will be able to discuss the relevance of PPP loans to M&A transactions.
• You will be able to explain the key transaction structure and timing considerations associated with an M&A transaction where the target has accepted a PPP loan.