Paycheck Protection Program – New Criteria for Seasonal Businesses

The U.S. Treasury has published a new interim final rule authorising temporary changes to the Small Business Administration Paycheck Protection Program (PPP). According to the guidance, “all lenders eligible to originate loans under the PPP [are allowed] to use an alternative criterion for calculating the maximum loan amount for PPP loans issued to seasonal employers.”

Per the interim final rule:

“In this rulemaking, Treasury is addressing the needs of certain potential borrowers that are seasonal employers by allowing seasonal employers to use an alternative base period for purposes of calculating the loan amount for which they are eligible under the PPP. Section 1102 of the Act permits seasonal employers to calculate their maximum loan amount by using their monthly average payments for payroll during “the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.” Some seasonal employers, however, have seasons that occur later in the year. Without the ability to use an alternative base period, many summer seasonal businesses would be unable to obtain funding on terms commensurate with those available to winter and spring seasonal businesses. This interim final rule addresses that disparity and ensures consistency in program administration by providing a seasonal employer the option of using any consecutive 12-week period between May 1, 2019 and September 15, 2019 for determining its maximum loan amount.”

See the Interim Final Rule and SBA’s Frequently Asked Questions (April 28) for additional information.