SBA Interim Final Rule: Partnerships and Seasonal Employer Loan Increases
May 14, 2020 - In the constantly evolving world of PPP loan guidance, the SBA has released another Interim Final Rule (IFR) that provides guidance regarding PPP loan increases for certain partnerships and seasonal employers. Many PPP loans were approved and disbursed to partnerships and seasonal employers before the SBA issued relevant guidance and, as a result, those businesses may not have received the maximum amount of PPP loans for which they are eligible.
On April 14, 2020, the SBA posted an IFR which included guidance for individuals with self-employment income. The IFR stated that “if you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as payroll costs, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership." Partnerships may now request loan increases if the original loan application didn’t include the partners’ self-employment income in payroll costs.
On April 28, 2020, the SBA posted an IFR which included guidance for seasonal employers that provided alternative criterion for determining the maximum loan amount available for seasonal employers. If the seasonal employers’ maximum loan amount is greater using the alternative criterion and they received a PPP loan before April 28, 2020, a revised calculation can be submitted requesting a loan increase.
Any partnerships and seasonal employers that are eligible for loan increases should contact their lender immediately. There is a limited window to receive the additional PPP funds. Please note that the loan increases can’t increase the maximum loan amount above the $10 million threshold for individual borrowers, or $20 million for corporate groups.