Affiliation Rules for SBA Loans and Paycheck Protection Program
When do groups of related for-profit businesses or affiliates fall outside of the “500 or fewer employees” threshold?
The CARES Act created a Paycheck Protection Program (PPP) within the U.S. Small Business Administration’s loan program commonly referred to as the “Section 7(a) loan program”. Generally, business concerns with 500 or fewer employees may qualify as eligible recipients of a PPP loan. Some business concerns may have affiliated entities whose employees must be aggregated for purposes of determining whether the business concern, together with any affiliates, meets the 500 or less employee threshold. This article addresses the affiliation rules set forth in the CARES Act and the SBA regulations and interim rules, as well as guidance provided by other government agencies, such as the Department of Treasury. See article here