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Until the U.S. Small Business Administration changes its position and rules, bankruptcy debtors are still unable to obtain PPP loans.
That’s because, under the Consolidated Appropriations Act 2021 (the Act) signed by President Trump on December 27, 2020, none of the provisions relating to bankruptcy are effective until and unless the SBA allows them.
The Act goes into great detail about how bankruptcy debtors, or trustees acting on their behalf, can obtain Paycheck Protection Program (PPP) loans.
But at the end of Section 320 of the Act, Congress states that the bankruptcy provisions allowing debtors in bankruptcy to obtain PPP loans takes effect only when the SBA submits a written determination to the Director of the Executive Office for the United States Trustees that any bankruptcy debtor or trustee that is authorized to operate the business of the debtor “would be eligible for a loan under paragraphs (36) and (3