PPP Updated FAQs, Schedule C+F and 2nd Draw Timing

Wichita District Office  - March 15, 2021

u s small business administration

Updated PPP FAQs Address Common Questions for Lenders

Frequently Asked Questions: PPP-FAQs-3.12.21.pdf (sba.gov)

  • Key Points
    • Addresses eligibility issues surrounding bankruptcy and prior criminal history
    • Clarifies that PPP loans no longer impact eligibility for employers to use the Employee Retention Credit
    • Advises that safe harbor for loan necessity no longer applies to Schedule C filers using a gross income of greater than $150,000
    • Clarifies second draw eligibility based on use of first draw funds for eligible expenses
    • Addresses applicants applying with an ITIN
    • Guidance on cancelling/withdrawing applications or approved loans for Schedule C filers if possible to take advantage of new calculation 

How to Calculate First Draw Loans: How to Calculate First Draw PPP Loan Amounts (sba.gov)

  • Key Points
    • Adds gross income calculation for Schedule C filers
    • Clarifies that only self-employed farmers and ranchers who file an IRS Form 1040 Schedule F with their Form 1040 and report Schedule F farm income on IRS Form 1040 Schedule 1 may use gross income to determine the loan amount. Single member LLCs and qualified joint ventures, as defined by IRS,13 that file Schedule F with their Form 1040 may use gross income to determine their loan amount. Only one spouse in a qualified joint venture may submit a PPP loan application on behalf of the qualified joint venture.
      Partnerships/partners must use applicable schedule such as the K-1
    • Provides guidance that Schedule C and Schedule F gross CAN be added together in Box A when using the 2483-C.

How to Calculate Second Draw Loans: HowtoCalculateSecondDrawFAQs-3.12.21.pdf (sba.gov)

  • Key Points
    • If using Schedule C and Schedule F, you must add together gross receipts from both to determine eligibility based on revenue reduction
    • Adds gross income calculation option for Schedule C filers
    • Same clarification provided for entity types that are permitted to use Schedule F in determining max loan amount
    • Provides guidance to add Schedule C and Schedule F gross together if applicable

 

Additional Updates

Lenders subscribed to SBA Connect received notification that as of March 14th, 2021, the PPP Platform has been enabled to accept 2nd draw applications for Borrowers who submitted their first draw in calendar year 2021.

The SBA is adding two additional organizational types to better support the Schedule C application process. Single Member LLCs, and Qualified Joint-Venture (spouses), can be utilized when utilizing the Schedule C gross income PPP calculation. The SBA PPP Platform and ETRAN will be updated in the near future with these changes.

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