PPP Update: Big News for (Very) Small Businesses
In an effort to extend PPP benefits to self-employed individuals, gig workers and other non-employer businesses, the SBA last week announced a revised loan calculation formula that will mean larger forgivable loan amounts for many such applicants.
Under the new rules, self-employed businesses who filed a Schedule C in 2019 or 2020 may now calculate their maximum loan amount using gross income instead of net profit, opening the door to considerably larger loans. The specific calculation will provide the applicant with a loan equal to a pro-rated 2.5 months of gross income. Moreover, the loan may be forgivable under the existing PPP rules.
Details of the formula were released Wednesday, along with new application forms for first and second draw loan applicants. Links to download the forms are included below. If you need assistance with the application process or have questions about this or any other aspect of the PPP program, contact your Weiss tax professional.
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