Redpath Insights

SBA Interim Final Rule

SBA Interim Final Rule: Partnerships and Seasonal Employer Loan Increases

by Alex Helkamp, CPA, CCIFP

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. 

Partnerships

On April 14, 2020, the SBA posted an IFR which included guidance for individuals with self-employment income.  The IFR stated that โ€œif 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 didnโ€™t include the partnersโ€™ self-employment income in payroll costs.

Seasonal Employers

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 employersโ€™ 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. 

Key Takeaway

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 canโ€™t increase the maximum loan amount above the $10 million threshold for individual borrowers, or $20 million for corporate groups. 

COVID-19 CARES Act

Alex Helkamp, CPA, CCIFP

Alex Helkamp, CPA, CCIFP

Alex Helkamp, CPA and CCIFP, is a director in the business tax service area at Redpath and Company. As tax leader on the construction, real estate, and engineering industry team, he assists clients with business tax planning, implementation of accounting standards, mergers and acquisitions transactions, and other accounting services. Having earned his CCIFP certification in 2017, Alex maintains a vast knowledge of construction industry issues and tax challenges faced by companies in the industry. Clients appreciate his insights to help them defer taxes, minimize tax liabilities, recognize tax credit opportunities, and free up cash flows. Alex enjoys meeting with his clients as much as possible throughout the year to discuss their goals and objectives, understand their unique needs, and help them find solutions that maintain their business and financial health. He is a frequent speaker on topics related to the construction industry and he has provided public accounting services at Redpath and Company since 2011.