Personal Finance & Money Asked on March 17, 2021
Official SBA PPP 1.0 FAQ had this answer:
- Question: What time period should borrowers use to determine their number of employees and payroll costs to calculate their maximum loan
amounts?Answer: In general, borrowers can calculate their aggregate
payroll costs using data either from the previous 12 months or from
calendar year 2019. For seasonal businesses, the applicant may use
average monthly payroll for the period between February 15, 2019, or
March 1, 2019, and June 30, 2019. An applicant that was not in
business from February 15, 2019 to June 30, 2019 may use the average
monthly payroll costs for the period January 1, 2020 through February
29, 2020. Borrowers may use their average employment over the same
time periods to determine their number of employees, for the purposes
of applying an employee-based size standard. Alternatively, borrowers
may elect to use SBA’s usual calculation: the average number of
employees per pay period in the 12 completed calendar months prior to
the date of the loan application (or the average number of employees
for each of the pay periods that the business has been operational, if
it has not been operational for 12 months).
Are newly established businesses that don’t have any 2019 documents still allowed to pick 01/01/2020-02/29/2020 period for PPP 2.0 average payroll cost calculation purposes?
If not, this seems like brutal omission in PPP 2.0 rules, because it creates two weird situations:
I think the answer is yes, but I'm not sure, because SBA's answer is worded confusingly. Is the following sentence for any business, or for seasonal businesses only?
An applicant that was not in business from February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the period January 1, 2020 through February 29, 2020.
I think this sentence applies to any business, including yours. To summarize what SBA is saying,
Answered by Orange Coast- reinstate Monica on March 17, 2021
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