SBA addresses how to calculate PPP loans, other issues

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SBA addresses how to calculate PPP loans, other issues

The U.S. Small Business Administration (SBA) issued guidance on how to calculate Paycheck Protection Program (PPP) loan amounts by business type and other issues shortly before it resumed accepting PPP applications from participating lenders Monday.

Last week’s Paycheck Protection Program and Health Care Enhancement Act, P.L. 116-139, enacted a $310 billion replenishment of the PPP program after the initial $349 billion in funding was exhausted in just 12 days. PPP loans are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans, according to the SBA and Treasury.

Information issued Friday on how to calculate maximum loan amounts includes questions and answers directed toward:

The SBA also added questions 32–35 on Friday and question 36 on Sunday to a PPP Q&A document that first published April 3. The new Q&A guidance:

Treasury also issued additional guidance to address the needs of seasonal employers. For the purposes of calculating the maximum loan amount, seasonal employers were initially allowed to use their monthly average payroll for the Feb. 15, 2019, to June 30, 2019, period or March 1, 2019, to June 30, 2019, period. Upon further consideration, Treasury determined that many seasonal employers have seasons that are later in the year. Seasonal employers are now allowed to use an alternate base period, specifically, any consecutive 12-week period between May 1, 2019, and Sept. 15, 2019.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director. Jeff Drew, a JofA senior editor, contributed to this article.

Research & References of SBA addresses how to calculate PPP loans, other issues|A&C Accounting And Tax Services
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