PPP Loans Slowing M&A Transactions
We have many franchise clients that are purchasing existing franchises or looking to expand thier number of franchises but are being hindered by Paycheck Protection Program loans for their own businesses or thier aquisition targets. PPP loans are secured by the business' assets and any transaction that transfers those assets or the ownership of the company is subject to SBA approval and assumption of the PPP loan by the purchaser. The loan foregiveness is advertised as 30-45 days, but that is after the process has been completed by your local bank.
Additionally, banks and the SBA are overwhelmed with applications for PPP loan foregiveness which is delaying processing traditional SBA loan applications. Franchisees need to make sure their purchase agreements, lease agreements and franchise agreements provide for additional time to address these delays. If you have already entered into a contract to purchase a franchise or open a location, it is better to deal with these delays before your have breached your agreement. Contact us to help.
Craig Fugate represents franchisees throughout Indiana and beyond. Contact us today to ensure you have the representation you need. If you would like to join an organization that provides valuable content and meetings for franchisees, please visit the Indiana Franchise Association Linked In Page.