On April 14, the SBA announced that a partnership (including an LLC treated as a partnership for tax purposes) may include partners’ self-employment income as eligible compensation on the partnership’s Paycheck Protection Program (PPP) application. Unfortunately, many partnerships had already applied for and received PPP loans before the SBA issued its guidance.
To enable partnerships to benefit from the full amount of PPP funds for which they’re eligible, the SBA issued a new rule yesterday that allows lenders to increase partnerships’ PPP loan amounts to take into account partners’ self-employment income. The SBA’s guidance also applies to seasonal businesses that previously received PPP funding, but that are now eligible for a larger PPP loan under the SBA’s April 28 rules for seasonal employers.
If you believe that your partnership could be eligible for additional funding under the SBA’s new rule, we strongly recommend that you contact your lender as soon as possible. Lenders will not be able to increase PPP loans after they have filed their final loan documentation with the SBA. Your lender can tell you whether you are eligible to apply for additional funding and how to apply for a PPP increase.