The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed Friday, March 27 by President Trump. This $2 trillion economic stimulus package included the Pay Check Protection Program, which authorized nearly $350 billion for small businesses and non-profits to meet payroll and keep their companies afloat during this public health emergency. This funding will be available through existing banks and other lending institutions thanks to an important provision led by Pennsylvania Senator Pat Toomey (R) and Virginia Senator Mark Warner (D).

Below is a link to a top-line overview of the program from the U.S. Department of Treasury outlining how the program will begin to rollout starting Friday, April 3. While we are still awaiting guidance on an affiliation rule that could affect small companies with equity investors, we sent a letter (available here) over the weekend to the Small Business Administration (SBA), the Department of Treasury, and the White House, and signed-on to a national letter with other state and national trade associations. The letters request:

– “…the Administration utilize its authority to clarify that the SBA Affiliate designation would not preclude small life sciences companies receiving equity investment from participation in the program if the headcounts of their equity partners are included in the 500-employee cap for medical technology companies and 1,000-employee cap for biotech companies. If there’s even a chance these rules could be triggered, companies will be forced to engage in a time-consuming interaction with SBA around existing “affiliate” rules given that there is a current rebuttable presumption.”

We will update you as soon as we receive more information on the affiliation rule and guidance from the Trump Administration, but here are several quick and helpful links for the program:

– For a top-line overview of the program CLICK HERE
– If you’re a lender, more information can be found HERE
– If you’re a borrower, more information can be found HERE
– The application for borrowers can be found HERE

Leave a Reply