Alvarez and Marsal
A&M Global Transaction Advisory Group

Diligence Insights: Treatment of PPP Loans in a Transaction

Greg Cibuzar
Managing Director

Co-authored by Christopher Howe, A&M Taxand Managing Director & David A. Javdan, A&M Public Sector Managing Director

Covid-19 has impacted most of our deals this year in various ways, both on the buy side and sell side. Currently, a common issue we are facing on smaller middle market deals relates to the treatment of loans received pursuant to the CARES Act Payroll Protection Program (PPP). The PPP, which closed to new loan applications on August 8, 2020:

  • Allowed founder-owned businesses to receive a loan to help them to continue to make payroll during the pandemic.
  • Was administered through the Small Business Administration (SBA) and amounts distributed through commercial banks.
  • Was not provided to sponsor backed businesses.

In this article, Alvarez & Marsal’s Managing Directors, Greg Cibuzar, Chris Howe and David Javdan provide diligence insights on the treatment of PPP loans in transactions…