The U.S. Small Business Administration (SBA) issued new Paycheck Protection Program (PPP) rules that allow 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.
The change opens the door for larger loans to self-employed individuals, many of whom don’t record much, if any, net profit on their Schedule C.
The calculation change is detailed in a 32-page interim final rule published late Wednesday afternoon by the SBA, which administers the PPP in partnership with Treasury. The SBA also released an updated set of frequently asked questions and six updated or new application forms, as follows.
- Updated PPP borrower first-draw (Form 2483) and second-draw (Form 2483-SD) application forms.
- New PPP first-draw (Form 2483-C) and second-draw (Form 2483-SD-C) borrower application forms for Schedule C filers using gross income.
- A revised lender application form for PPP loan guaranty (Form 2484)
- A revised PPP second-draw lender application form (2484-SD)
AICPA leaders will discuss the SBA guidance, new forms and FAQs during an online Town Hall that will start at 3 p.m. ET Thursday.
Continue reading this article from Jeff Drew in The Journal of Accountancy here.