Tuesday, April 23, 2024

Guidance released on PPP loans to bank directors

The following question was asked:
Please provide guidance on how to proceed with directors of banks receiving PPP loans under Reg O.

Here is the response from the SBA:
13 CFR 120.110(a)(15) (currently 120.110(0)) – prohibiting loans to businesses in which the Lender or CDC, or any of its Associates owns an equity interest. The business is eligible but it has to get the loan from another lender, otherwise it is a conflict of interest.  This is true for PPP as well as 7(a).