The Small Business Administration (SBA) issued a new interim final rule that supplements the guidance for the Paycheck Protection Program (PPP) included in the first interim final rule for the PPP issued on April 2.

Self-Employed

The additional guidance provides specific information on calculating the maximum loan amount for individuals with self-employment income who file a Form 1040, Schedule C, Profit or Loss From Business. The 2019 Form 1040 Schedule C is required to be provided with the PPP loan application, according to the interim rule, which notes that detailed documentation guidelines are also required. Further guidance is provided on how PPP loans may be used and how loan forgiveness will be calculated. The SBA is expected to issue more guidance for those individuals with self-employment income who were not in operation in 2019, but were in operation as of Feb. 15, 2020.

Partners of Partnerships

Partners in a partnership with self-employment income 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 (or LLC filing taxes as a partnership). Individual partners may not submit a separate PPP loan application as a self-employed individual.

PPP Status

As of April 16, 2020, the SBA announced it had exhausted the original $349 billion of funds in the PPP. However, the Senate unanimously voted on April 21, 2020 to provide an additional $310 billion to the program. If you have not already received authorization for your PPP loan, you should contact your bank. If you have yet to apply, gather your information and have it ready to apply as soon as the SBA announces they have opened up the application process. For assistance in gathering your financial data, contact Doeren Mayhew’s business advisors.