On April 14, 2020, after many borrowers had already submitted their PPP loan applications, the SBA issued guidance for individuals with self-employment income. This rule prohibited partners in a partnership from submitting a loan application for themselves. Instead, the self-employment income of general active partners was to be reported as a payroll cost of the partnership, up to the $100,000 annual limit, on the partnership’s PPP loan application. Due to this late guidance, many partnerships may not have received the maximum loan amount for which they are eligible.
The latest guidance from the SBA allows lenders to increase the amount of a PPP loan to include additional payroll costs related to partner compensation. However, the lender must not yet have submitted certain paperwork to the SBA in order to benefit from this provision. We recommend you contact your banker as soon as possible if this provision applies to you.
A similar provision applies to seasonal employers. Please contact your DunlapSLK team member for additional information.