- SBA confirms new PPP rules for individuals who file Schedule C on their return
- What does this change mean for sole proprietors?
Good news is here for the 41 million self-employed workers in the US: the SBA has just announced an updated—and lucrative—PPP borrowing interim final rule (IFR) for businesses without employees.
The 32-page IFR, released Wednesday afternoon, now allows sole proprietors to use gross income to calculate PPP loans.
Since businesses with no employees cannot use payroll to calculate loans, previous guidance required such small businesses to base their loans off their net income listed on their returns. However, net income includes expenses and deductions, which resulted in smaller loan amounts or even ineligibility for some sole proprietors. The transition to calculating gross incomes will mean larger loan amounts and a fairer playing field for the self-employed.
Will eligible businesses who have already received their PPP loans be able to reapply for more loan money?
After much concern and questioning by borrowers who have already received their loans, the SBA clarified in the new guidance that “the change is not retroactive. The SBA and Treasury have ruled that borrowers whose PPP loans already have been approved cannot increase their loan amount based on the new methodology.”
If you file your individual return with a Schedule C form and have not yet applied for a PPP loan, now is the time to act.
Sole proprietors should take advantage of all the PPP perks now available to them. There is still time left in the two-week early access window for the smallest of small businesses, which ends on March 9th.
Looking for more guidance? DSJ is here to assist you and your business. Call us at 516-541-6549, stay up to date on COVID-19 news, and meet our Coronavirus Response Team to learn more about how we can help.
Sincerely,
Devin McQuillan
Associate, Creative Solutions
Contact:
516-541-6549 | Email