The SBA issued new Paycheck Protection Program guidelines allowing those that are self-employed and file Form 1040, Schedule C to calculate their maximum loan amount using gross income instead of net profit. Larger loans could help the self-employed and gig workers that have been hit particularly hard by the economic downturn survive the pandemic.
These new rules apply only for new loan applications that are approved after March 3, 2021. If a first or second draw PPP loan has already been approved, the loan cannot be increased based on the updated calculation methodology.
With sole proprietorships being the most common business structure in the United States, these new rules are good news, giving access to larger forgivable loans to millions of people.
Visit SBA’s FAQs for more information about the Paycheck Protection Program. Let us know if you have questions about the PPP Loan!