Update, Friday April 24th: The Small Business Administration has announced that it will begin accepting applications for the second round of Paycheck Protection Program loans on Monday, April 27 at 10:30am. We plan to begin accepting applications again at that time. Please watch this website and your email for additional information on Monday morning. Thank you for your business. We are all in this together.
On April 16th, the Small Business Administration (SBA) announced that the funding for the Paycheck Protection Program (PPP) has been fully exhausted and they are no longer accepting applications. While there is a possibility that Congress might enact additional funding, we are not accepting applications at this time as we cannot predict if Congress will initiate additional funding or if that the program and/or application may change significantly. When new funding becomes available, we will update our website and social media to alert any business customers who have not yet applied.
Original Post:
The Small Business Administration (SBA) has issued the following interim rule clarifying eligibility and application processes for independent contractors and self-employed individuals applying for Paycheck Protection Program (PPP) loans.
- Self-employed individuals who filed Schedule C with their federal income taxes and were operating on Feb. 15, 2020, are eligible for PPP loans, except for partners in a partnership. The partnership is the eligible entity, and the rule provides guidance for calculating the self-employment income of general active partners as payroll cost.
- The rule also provides processes for self-employed applicants to calculate their maximum loan amount, depending on whether they have employees or not. Self-employed PPP loan recipients may use the proceeds for “owner compensation replacement,” based on monthly net profits.
- Many bank directors and shareholders are eligible for PPP loans from their banks, provided that the eligible business follows the same process as any similarly situated customer or account holder and does not receive favoritism. However, specific officers and key employees of the bank may not obtain a PPP loan from their own bank but may apply at a different lender.
- Gambling businesses are eligible for PPP loans, provided their legal gaming revenue did not exceed both $1 million and 50% of total business revenue in 2019.
- Agency requirements for loans pledged for borrowings at a Federal Reserve Bank or advances from a Federal Home Loan Bank do not apply to PPP loans.
Visit the U.S. Treasury website for the full-text of the SBA’s interim rule.
