SBA: It’s (Maybe) Fine if You Didn’t Count the Employees of Your Foreign Affiliates for PPP Purposes

In what might be a classic “now you tell me” scenario, the SBA issued a new rule May 21 saying that if an applicant failed to count the employees of its foreign affiliates when it was determining its eligibility, the SBA will not hold that against the applicant so long as the application was submitted before the SBA clarified that requirement.

The problem with that, however, is that because the safe harbor ended May 18, it’s highly likely that a lot of those businesses already gave their PPP loan back. They’d be forgiven for thinking they had to, as earlier this month Sen. Marco Rubio was indicating that Congress would investigate companies who took PPP funds for which they weren’t eligible.

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What Happens When a Company Takes a PPP Loan it Doesn’t Need?

As we said in this space a few days ago, the SBA has put in place a safe harbor until May 14 for companies to return Paycheck Protection Program loan money if they find they don’t need it. No harm, no foul.

So, what happens if they don’t need it, but don’t return it? Maybe Clubber Lang said it best.

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Unreasonable Cost Adjustment Leads to Sustained Protest

Of late the pages of this blog have been entirely coronavirus and COVID-19 obsessed—and for good reason. But that does not stop the Government Accountability Office from deciding bid protests.

With all that’s been going on, writing about a GAO decision regarding run-of-the-mill unreasonable cost realism evaluation is downright refreshing.

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SBA, Can a Foreign-Owned Entity Receive a PPP Loan or What?

Well, we thought we had this figured out. Yet here we are a week later and we keep hearing conflicting reports.

The question remains, can a foreign-owned company receive a Paycheck Protection Program loan or not? Let’s try to figure it out.

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UPDATE: Paycheck Protection Program Form Now Does not Disqualify Businesses for Foreign Ownership

UPDATE: The form this post references has been revised to ask whether the United States is the “principal place of residence for all employees of the Applicant included in the Applicant’s payroll calculation”.

Based on the text of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the fact that a company has foreign owners shouldn’t necessarily disqualify it from participating in the Paycheck Protection Program (PPP).

But the form used to apply says otherwise.

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Client Spotlight: Penn Parking Fights COVID-19 by Making Face Shields

When you are a business that manages parking lots and garages and then suddenly out of the blue the entire country stops leaving the house, well, you’d be excused for some despair.

But that’s not what Penn Parking, Inc., did. Instead, it decided to help. It is making face shields for doctors, nurses, and other healthcare professionals on the front lines in Maryland, where Penn Parking is located.

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