Applicable affiliation rules … U.S. companies with foreign ownership may be eligible for both the PPP and EIDL government loan programs, depending on corporate structuring. On Oct. 2, 2020, the Small Business Administration (SBA) issued a Procedural Notice changing the rules regarding when and how the SBA defines a “change of ownership” event. A U.S. subsidiary of a foreign-owned company may qualify for CARES Act loan programs. The SBA provides very specific Change of Ownership Requirements, which can be found in revised SOP 50 10 5(J), effective January 1, 2018.. If foreign ownership was prohibited, wouldn’t the SBA eventually say so? In this post, I summarize the highlights of the rules for SBA 7(a) business acquisition loans. - According to SBA’s guide to size and affiliation rules, when calculating the size of your business, you must include the annual receipts and employees of your domestic and foreign affiliates, regardless of whether the affiliates are organized for profit. SBA loans can be a great way to finance a small business acquisition. Like most government programs, SBA loan programs have plenty of rules. We support America's small businesses. The SBA goes on to state that prior to its 8/24 Rule, its position was that any individual who had held any interest in a borrower was deemed to be an “owner”: “There is no exception in the rule based on the owner-employee’s percentage ownership”. The SBA connects entrepreneurs with lenders and funding to help them plan, start and grow their business. Recently published FAQs provide additional clarity that foreign-owned companies may want to consider, even if their loan application was already rejected. UPDATED: March 31, 2020: According to the U.S. Treasury, small businesses can apply for Paycheck Protection Program (PPP) loans through existing SBA lenders starting April 3, 2020.Other lenders may apply to the SBA to be included as an approved lender starting April 10, 2020. There are three key sources of information about SBA loan rules: the U.S. Code of […] Business concerns seeking to qualify as a “small business concern” under section 3 of the Small Business Act (15 U.S.C. This notice provides information concerning required procedures for changes of ownership of an entity that received Paycheck Protection Program (PPP) funds. 632) on the basis of the employee-based size standard must do the same. The historical SBA affiliation rules do not necessarily apply to PPP and other CARES Act loan eligibility. This document explains that businesses are not eligible for SBA assistance if “Located in a foreign … An applicant must count all of its employees and the employees of its U.S. and foreign affiliates, unless they have an exception to the affiliation rules. Finally, there’s the SBA’s Standard Operating Procedure (SOP) 50 10, Subpart B, Chapter 2. 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