NOTE – on Thursday, April 16, 2020, the SBA announced it had fully committed the entire $350B PPP appropriation. Consequently, the SBA and banks are no longer accepting applications for PPP loans. This could change in the event Congress appropriates additional funding to the program.
On April 14, the Small Business Administration (SBA) released new guidance regarding the Paycheck Protection Program (PPP), a $350 billion program that targets aid to small businesses dealing with losses resulting from the coronavirus pandemic. The PPP was created as a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27th.
In the new release, the SBA published specific information on a variety of areas where applicants have had questions, including:
- Guidance to help individuals with self-employment income understand how to calculate the maximum loan amount they can receive through the program. They will need to use Form 1040, Schedule C, Profit or Loss From Business, which will be provided with the PPP loan application.
- Instructions on how to report the self-employment income of partners in a partnership. Up to $100,000 (annualized) of the income may be reported as a payroll cost on a PPP loan for the partnership. The SBA clarified that individual partners should not submit separate PPP loan applications.
- Guidance regarding the eligibility of some particular business concerns for the PPP program and clarification regarding pledge requirements for PPP loans.
For further details on the SBA supplemental PPP guidance, check out this article from the Journal of Accountancy or visit the PPP loan FAQ page.