SBA Alters Rules of PPP Loans to Allow For Costs of Partnerships
In response to confusion surrounding the Paycheck Protection Loan (PPP) loan process for certain partnerships and LLCs, the Small Business Administration (SBA) has administered guidance to clear up the applicability of partnership costs to a PPP loan application. Prior to this guidance, many business partners were not aware that they could or should report their self-employment income as a payroll cost for the partnership loan application. Because that income was not part of the loan application, some partnerships were not receiving as much PPP loan money as they could have been.
The new PPP loan process for partners allows PPP lenders to grant additional loan money to these partnerships. A partnership or LLC may receive up to $100,000 per partner (when claimed as a payroll expense). Eligible partnerships or LLCs should contact their loan providers to amend their previous loan applications to include this information. The business should also have documented evidence of any increase in costs and be prepared to substantiate any claims of additional loan funds.