On Oct. 7, the Small Business Administration issued Procedural Notice 5000-20057 with an effective date of Oct. 2. This procedural notice provides guidelines and requirements for SBA approval for changes of ownerships for business entities that have received Paycheck Protection Program funds  under the Coronavirus Aid, Relief and Economic Security Act.

A borrower should stringently follow the SBA's guidelines if a change of ownership may be on the horizon due to a prospective merger and/or acquisition transaction. Following proper approval protocol prior to a change of ownership ensures that a borrower remains within the bounds of the law and guidelines provided under the procedural notice.