SBA Allows Lenders To Increase Certain Borrower Loan Amounts - May 15, 2020
On May 13, 2020, the SBA issued a new interim final rule that allows lenders to increase loan amounts made to partnerships and seasonal employers who had completed the loan application prior to interim rules issued on April 14, 2020 and April 28, 2020. The April 14, 2020 interim rule allowed general active partners to report their employment income as a payroll cost, up to an amount of $100,000 annualized; while the April 28, 2020 interim rule provided an alternative criterion for calculating the maximum loan amount for PPP loans issued to seasonal employers.
The new interim rule issued recognizes that partnerships and seasonal employers approved for a PPP loan prior to the aforementioned guidance likely did not receive the maximum PPP loan for which they were eligible. Further, while PPP loans are to be made as one disbursement, lenders are now authorized to make an additional disbursement to borrowers that have already received funds and are entitled to an increase in the amount.
The new interim rule issued recognizes that partnerships and seasonal employers approved for a PPP loan prior to the aforementioned guidance likely did not receive the maximum PPP loan for which they were eligible. Further, while PPP loans are to be made as one disbursement, lenders are now authorized to make an additional disbursement to borrowers that have already received funds and are entitled to an increase in the amount.