SBA Issues Guidance - Businesses Over 500 Employees MAY Qualify for the Paycheck Protection Program
The SBA recently provided an updated FAQ document and included a comment under the Q&A that may allow companies with more than 500 employees who can certify they have been harmed by the current crisis.
Companies should consult with their accountant to better understand if they may qualify.
We specifically draw your attention to the below Q&A in the
linked document
.
2. Question: Are small business concerns (as defined in section 3 of the Small Business Act, 15 U.S.C. 632) required to have 500 or fewer employees to be eligible borrowers in the PPP?
Answer: No. Small business concerns can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue- 1 This document does not carry the force and effect of law independent of the statute and regulations on which it is based. As of April 6, 2020 based size standard corresponding to its primary industry. Go to
www.sba.gov/size
for the industry size standards.
Additionally, a business can qualify for the Paycheck Protection Program as a small business concern if it met both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.
A business that qualifies as a small business concern under section 3 of the Small Business Act, 15 U.S.C. 632, may truthfully attest to its eligibility for PPP loans.
Because this guidance is quite complicated, we recommend that businesses over 500 that want to try and qualify for the PPP consult their professional accountant or attorney to verify if your business will qualify.
INFORMATION PROVIDED COMPLIMENTS OF THE NATIONAL GROCERS ASSOCIATION
