SBA Issues Guidance on Calculating Max PPP Loan Size

With the Small Business Administration reopening its E-Tran system for Paycheck Protection Program applications on Monday morning, SBA last night issued guidance to help borrowers and lenders calculate and document the maximum PPP loan amount a business may be eligible for. The guidance covers several situations about which lenders have sought clarity.

The guidance addresses calculations and documentation requirements for applicants that are:

  • Self-employed with no employees.
  • Self-employed with employees.
  • Self-employed farmers who report income on Schedule F.
  • Partnerships.
  • Subchapter S and C corporations.
  • Nonprofit organizations.
  • Eligible nonprofit religious organizations, veterans’ organizations and tribal businesses.
  • Limited liability company owners.

“Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rules,” SBA added in the guidance. “The U.S. government will not challenge lender PPP actions that conform to this guidance and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time.”

In an email to bank CEOs earlier today, ABA President and CEO Rob Nichols reminded bankers of SBA’s FAQ 17, issued on April 6, which stated that “Borrowers and lenders may rely on the laws, rules, and guidance available at the time of the relevant application.” Based on that guidance, Nichols wrote, “banks are not required to recalculate the applications that borrowers have already submitted but that banks have not yet entered into E-Tran, which we confirmed with Treasury this morning.”

Read all ABA Banking Journal coverage of the SBA Paycheck Protection Program.

This article has been updated to reflect Nichols’ email to bank CEOs.