SBA Announces New PPP Rules
SBA Announces New Calculation and Eligibility Rules for PPP
The SBA released an Interim Final Rule (IFR) regarding temporary changes related to loan amount calculations and eligibility of loans made through the Paycheck Protection Program (PPP).
The 32-page IFR provides self-employed individuals with the ability to calculate their maximum loan amount using gross income instead of net profit, specifically those individuals who file Form 1040, Schedule C, Profit or Loss from Business.
In the IFR, which is titled “Business Loan Program Temporary Changes; Paycheck Protection Program — Revisions to Loan Amount Calculation and Eligibility,” provides revisions to the maximum loan calculations for sole proprietors who file Schedule C returns.
Keep in mind that the change is not retroactive. The SBA and Treasury have ruled that borrowers whose PPP loans already have been approved cannot increase their loan amount based on the new methodology.
Loan Calculation Instructions for Schedule C Filers
Instructions for maximum loan calculations for Schedule C filers with and without employees is detailed in this IFR.
Updated Borrower Application Forms
The first-draw and second-draw application forms for borrowers filing for the Paycheck Protection Program were revised on March 3, 2021.
For new borrowers who file Schedule C using gross income, a new first-draw form and second-draw form was released.
Deadline To Apply
If you are in the process of completing an application for a PPP loan, be aware of application deadlines.
Small businesses and non-profits with fewer than 20 employees and sole proprietors can apply for Second Draw PPP loans from February 24th through March 9, 2021. The program will be open to all eligible entities, from March 10th through March 31, 2021.
To read the updated FAQs from the SBA, please click here.
Questions?
Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.
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