--- title: PPP Loans and M&A description: Small business owners considering selling their business should be aware of the Procedural Notice No. 5000-20057 (the “Notice”) issued by the Small Business Administration (“SBA”) on October 2, 2020. image: https://blog.mansourgavin.com/hubfs/Stock%20images/Loans%20Concept.%20Word%20on%20Folder%20Register%20of%20Card%20Index.%20Selective%20Focus..jpeg --- [![MansourGavinLPA](https://blog.mansourgavin.com/hs-fs/hubfs/MansourGavinLPA%20-Jan2018/Images/mg-logo.png?width=325&height=33&name=mg-logo.png "MansourGavinLPA")](http://mansourgavin.com/) - [ABOUT US](http://mansourgavin.com/about-us/) - [PROFESSIONALS](http://mansourgavin.com/professionals/) - [PRACTICE AREAS](http://mansourgavin.com/practice-areas/) - [BLOG](https://blog.mansourgavin.com) - [NEWS & EVENTS](http://mansourgavin.com/news-and-events/) - [CONTACT US](http://mansourgavin.com/contact-us/) - [ABOUT US](http://mansourgavin.com/about-us/) - [PROFESSIONALS](http://mansourgavin.com/professionals/) - [PRACTICE AREAS](http://mansourgavin.com/practice-areas/) - [BLOG](https://blog.mansourgavin.com) - [NEWS & EVENTS](http://mansourgavin.com/news-and-events/) - [CONTACT US](http://mansourgavin.com/contact-us/) # Blog [![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=PPP%20Loans%20and%20M%26A) [![Share on Email](https://static.hubspot.com/final/img/common/icons/social/email-24x24.png)](mailto:?subject=Check%20out%20https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fblog.mansourgavin.com%2Fppp-loans-and-mergers%3Futm_medium%3Dsocial%26utm_source%3Demail) # PPP Loans and M&A [Corporate and Business](https://blog.mansourgavin.com/tag/corporate-and-business) December 28, 2020 | 11: 52 AM By [Tatyana Pishnyak](https://mansourgavin.com/people/tatyana-pishnyak/) Small business owners considering selling their business should be aware of the Procedural Notice No. 5000-20057 (the “Notice”) issued by the Small Business Administration (“SBA”) on October 2, 2020. According to the Notice, prior to selling more than 50% of the company’s stock or more than 50% of its assets, companies that received Paycheck Protection Program (“PPP”) loans, must determine whether the SBA must consent to the sale prior to closing. The Notice requires businesses either (i) get the SBA approval prior to the sale or (ii) complete a forgiveness application and to set up an escrow account with the PPP lender which is funded with money equal to the outstanding balance of the PPP loan. If there is a sale of at least 20% but not more than 50% of stock, no SBA consent is required provided that the business owner notifies the PPP lender prior to the sale. If there is a sale of less than 50% of assets or less than 20% of stock, this is not a “change of ownership” under the Notice and no SBA approval is required. Make sure to check your loan agreement with your PPP lender as it may contain additional terms or additional notification requirements. You may read the full Notice [here.](https://www.sba.gov/sites/default/files/2020-10/5000-20057-508.pdf) Additionally, on November 18, 2020, the IRS issued Rev. Rul. 2020-27 (the “Ruling”) addressing the issue of deductibility of Paycheck Protection Program (“PPP”) loans. The IRS directed that a PPP loan taxpayer who used the proceeds of a PPP loan to pay for various business expenses (and specifically, for the expenses listed in section 1106(b) of the CARES Act) may not deduct those expenses in the year they were incurred. However, on December 20, 2020, Congress reached an agreement updating the CARES Act to provide additional pandemic relief to businesses, including language which permits PPP borrowers to take ordinary business deductions for PPP allowable expenses paid with PPP loan funds. The update would seemingly override the IRS Ruling above.  Our [Business and Corporate Services Group](https://mansourgavin.com/practice-area/corporate-and-business-services/) and help you navigate the process of buying or selling your business. 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