The CARES Act, which passed at the end of March, provides various forms of financial relief to businesses impacted by the coronavirus related public health mitigation measures. The program allocated $349 billion to the Paycheck Protection Program (PPP)through loans under the Small Business Administration (SBA) and facilitated by qualified lenders. An additional $310 billion became available for the program with the passing of Enhancement legislation last week.
SBA and the Department of Treasury release new guidance and clarifications every day to lenders and borrowers participating in the (PPP) to address issues as they are communicated to the SBA. Final guidance on various elements of the forgiveness calculation was expected 4/27/2020. As of this morning, it is still not available as of this morning and many questions remain.
Yesterday however, new guidance became available that provides remedy to summer seasonal businesses applying for the PPP. As we previously reported, the Treasury updates an FAQ page almost daily and has released multiple Interim Final Rules (IFR) to formally address modifications to the original program as legislated in the CAREs Act.
On Monday, April 27, 2020, the U.S. Treasury and SBA released the Interim Final Rule on Additional Criterion for Seasonal Employers (the “April 27 Guidance”). The April 27 Guidance expands the time period at which seasonal employers can look in order to (i) calculate average monthly payroll expenses and (ii) determine whether a seasonal employer was operational when applying for a loan under the Paycheck Protection Program (“PPP”).
The new provision from the IFR allows the use of any 12-week period between May 1, 2019 and September 15, 2019 to calculate the maximum loan amount for a seasonal business. Under this interim final rule issued pursuant to section 1109 (US Treasury Program Management Authority) of the Act, a seasonal employer may alternatively elect to determine its maximum loan amount as the average total monthly payments for payroll during any consecutive 12-week period between May 1, 2019 and September 15, 2019.
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We are in this together,
Brinker Simpson & Company, LLC
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).