The Paycheck Protection Program and COVID-19 Relief Funds

As we all experienced, the COVID-19 pandemic was a pivotal historical event with a range of lasting political, social, economic, medical, and legal changes to our country. One such legal development of this time period was the deluge of federal funds that were poured into the private sector to stimulate and gird the American economy. Perhaps most notable among this fiscal framework was the Paycheck Protection Program (“PPP”), although smaller disbursements were made under the Economic Injury Disaster Loan (“EIDL”) program.

As a result of COVID-19 legislation, almost $1 trillion was dispatched to businesses around the country as PPP loans. These low-interest, forgivable loans were issued to private businesses of varying sizes with the understanding that such loans would be used to prevent mass layoffs and smooth out the economic disruption caused by the pandemic and its related lockdowns. These loans were subject to a complicated regulatory framework governing who could apply for such loans, what these funds could be used for, and the terms of forgiveness.

In practice, PPP funds were issued quickly and with sometimes-lax oversight. While undoubtedly many jobs were saved by this program, certain recipients have come under scrutiny for the use of such funds. Though certain bad actors have intentionally misappropriated these funds, other recipients acting in good faith have simply found themselves inadvertently ensnared in the tangled regulatory framework of these programs.

Given the size of the fiscal outlays relating to COVID-19 relief funds, and the complicated regulations surrounding such programs, litigation regarding the propriety of these expenditures will surely continue for years to come. Whether you find yourself defending the propriety of your own PPP loans, or questioning the use of such funds by a third party, the Bochetto and Lentz team has vast array of experience in these suits. Regardless of whether you are adverse to an employer, business partner, or the government, Bochetto and Lentz stands ready to counsel you on how to ensure that your rights are protected in any dispute relating to PPP loans or similar relief programs.