Partnerships and Seasonal Employers may Be Eligible for More PPP Money
There is a new PPP interim final rule (the tenth) on increasing PPP loan amounts for partnerships and seasonal employers.
Before this rule, small businesses that are structured as partnerships or classified as seasonal employers did not have any clear guidance on the PPP loan amounts they were eligible to receive. The language states “this interim final rule authorizes all PPP lenders to increase existing PPP loans to partnerships or seasonal employers to include appropriate amounts to cover partner compensation […] or to permit the seasonal employer to calculate its maximum loan amount using the alternative criterion posted on April 28, 2020.”
That means if a partnership received a PPP loan “that did not include any compensation for its partners,” then “the lender may electronically submit a request through SBA’s E-Tran Servicing site to increase the PPP loan amount to include appropriate partner compensation.” The new and improved way to calculate your maximum loan amount that takes into consideration partner compensation can be found here, with question four.
For seasonal employers, the new rule allows the calculation for a maximum PPP loan amount to be determined based on the employer’s average total monthly payments for payroll, ‘‘the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.’’ Alternatively, an employer may “elect to determine its maximum loan amount as the average total monthly payments for payroll during any consecutive 12-week period between May 1, 2019 and September 15, 2019.” More on that can be found here, on page 2.
Many Questions Remain to be Addressed
We will continue to keep you updated as new guidance is released by the Treasury and SBA. Additionally, we are pleased to host a webinar on Wednesday, May 22nd, exploring the new PPP Loan Forgiveness application and updated guidance.
Please visit the Warady & Davis LLP COVID-19 Resource Center for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600 or firstname.lastname@example.org.
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