Partnerships and Seasonal Employers Are Allowed to Increase Paycheck Protection Program (PPP) loan in Certain Circumstances
The Small Business Administration (SBA) issued an interim final rule allowing partnerships and seasonal employers the ability to increase PPP loans received.
SBA posted an interim final rule on April 14, 2020 guiding individuals with self-employment income. It stated the self-employment income of the general active partners was to be reported as a payroll cost on the PPP loan application filed by, or on behalf of, the partnership. The maximum amount to consider as a payroll cost for each partner was $100,000 annualized.
The interim rule also provided an alternative criterion for calculating the maximum PPP loan amount for seasonal employers.
Before this interim final rule, the PPP loan had to be disbursed in one payment. Since some PPP loan recipients could not take advantage of this guidance, the SBA is allowing the affected borrowers additional time to apply for the additional loan amount. The request must be made before the lender submits SBA Form 1502. The due date of the form is May 22, 2020. We recommend checking with your lender to determine if SBA Form 1502 has been submitted. If not, ask the lender about requesting an increase in the original loan.
To learn more, please contact us at 401-831-0200.