Is your Paycheck Protection Program loan not covering as much as you need it to? Some businesses may be able to go back for more. The Small Business Administration (SBA) released an interim final rule regarding PPP loan increases for partnerships and seasonal employers.
The April 14 interim final rule stated “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 a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership.” Then on April 28, the Department of Treasury issued new criteria for calculating the maximum loan amount for PPP loans issued to seasonal businesses. Since so many of the PPP loans were issued BEFORE the above guidance, those businesses may not have gotten the full amount they qualified for.
SBA has now notified lenders they can increase existing PPP loans to partnerships and seasonal employer loan holders. The new interim rule allows for loan increases to cover compensation for partners, and seasonal employers can now determine their maximum loan amount to the latest alternative criteria. Lenders have been notified the additional disbursement should be done before they submit SBA Form 1502 which is due within 20 calendar days after a PPP loan is approved.
However, please keep in mind that there is still a cap on a maximum loan of $10 million for a borrower. In order to apply for a PPP loan increase, a borrower must provide documentation supporting their calculations for the requested increase.