Important Changes to the PPP Loan Program
Could Make More Businesses Eligible
The U.S. Small Business Administration (SBA) issued new Paycheck Protection Program (PPP) rules that allow independent contractors, sole proprietors, and self-employed individuals who file Form 1040, Schedule C, Profit or Loss From Business, to calculate their maximum loan amount using gross income instead of net profit.
This change opens the door for larger loans to these individuals, many of whom don’t record much, if any, net profit on their Schedule C.
The interim final rule revises the maximum loan calculations for those who file Schedule C returns, but the change is not retroactive. Borrowers whose PPP loans have already been approved cannot increase their loan amount based on the new methodology. However, if you are one of these businesses affected by this rule, and you were not previously eligible for a PPP loan, now is the time to have that reviewed.
The new rule allows a Schedule C filer who has yet to be approved for a PPP first or second-draw loan in the current phase of the program to elect to calculate the owner compensation share of its payroll costs based on either net profit (as reported on line 31 of Schedule C) or gross income (as reported on line 7 of Schedule C).
Sabal Palm Bank is still actively taking new PPP loan applications and we are ready to help you get the most out of your PPP loan. Please call us at (941) 806-5486 to get your application started, or with any PPP loan questions.