Brownstein Client Alert, April 24, 2020
The Small Business Administration (“SBA”) released revised guidelines today that allow otherwise eligible small gaming businesses to be able to participate in the Paycheck Protection Program (“PPP”). This marks a reversal of the SBA’s prior position that made most small gaming businesses ineligible for loans through the PPP that was expanded significantly by the CARES Act.
Although the CARES Act itself did not make such businesses ineligible, the SBA’s initial guidance excluded small businesses that receive more than one-third of their annual gross revenue from legal gambling activities from the program. This led to an effort by Nevada congressional delegation as well as the American Gaming Association, represented by Brownstein’s government relations team in Washington, D.C., to engage with the SBA, the Department of the Treasury and the White House to advocate for a change the SBA’s position. With this change, the PPP is now available to any legal gambling-related business that otherwise qualifies.
The PPP offers companies with 500 or fewer employees low-interest loans of up to $10 million to cover costs during the economic crisis brought about by the COVID-19 pandemic. Since April 3, the SBA has approved more than 1.6 million loans totaling almost $350 billion. On April 24, President Trump signed a bill which expands CARES Act funding for small business loans by adding another $320 billion in response to continuing demand for such funds.
The additional PPP funding, along with this new determination by SBA that small gaming businesses are eligible to participate, is potentially very good news for many small businesses in Nevada. Brownstein has established a Small Business Rapid Response Team to assist businesses as they navigate this and other government programs intended to provide relief from the current economic crisis.
Information is changing daily and some of the content included in this alert may have changed or been updated since publication.
Click here to read more Brownstein alerts on the legal issues the coronavirus threat raises for businesses.
This document is intended to provide you with general information regarding changes to the SBA Paycheck Protection Program to include gaming companies. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.