Since the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) at the outset of the COVID Pandemic, a question has lingered as to the eligibility of consumer finance companies to secure Paycheck Protection Program (PPP) loans under the law.  The Small Business Administration (SBA), tasked with doling out the dollars under the Program, has sent mixed signals on the question of eligibility of “lenders” to receive such loans and forgiveness of such loans—notwithstanding the clear language of the law that “any business concern…shall be eligible to receive a covered loan.”

Some consumer finance companies have indeed, received forgiveness of their PPP loans.  However, too many finance companies that received PPP loans have been denied forgiveness on the basis that such finance company lenders were ineligible under the CARES Act—even though initially granted a loan.  And, too often, the bank lenders to our finance companies have thrown up their hands and thrown in the towel. 

That’s a shame.

There are excellent arguments to be made that consumer finance companies are Eligible Recipients under the PPP, for Covered Loans made during the Covered Period (these are all defined terms).  This is particularly 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 taken within 30 days of notice from your bank that your SBA PPP loan has been deemed ineligible.  These notices have been going out now. So, if you want to challenge the SBA’s ineligibility determination, times a’wastin…

Please note: This is the one hundred eighty-fourth blog in a series of Back to Basics blogs, in which relevant and resourceful information can be easily accessed by clicking Dentons - Consumer Finance Report.