On Mar 3, 2021, the Small Business Administration (SBA) released new guidance that implements President Biden’s recent Paycheck Protection Program (PPP) changes. One of the updates is a new loan calculation option for applicants that file Schedule Cs. BlueVine is currently reviewing the new guidance and is doing its best to implement this new Schedule C option.
Here’s a high-level overview of the Mar 3, 2021, changes for Schedule C applicants:
- Previously, Schedule C applications had to use net profit—line 31—to calculate their PPP loan amount. Now, they have the option to use gross income—line 7
- There are new First and Second Draw applications for those who would like to apply using their gross income instead of net profit
- First Draw applicants that use Schedule C gross income and report more than $150,000 gross income on their Schedule C may be subject to additional SBA review
- To get a PPP loan, applicants must need the loan to keep their business going due to economic uncertainty. Previously, borrowers with loans under $2 million generally would automatically meet this condition
- Due to Mar 3, 2021, updates, if a Schedule C PPP applicant uses gross income for its PPP loan and reports over $150,000 of gross income on its Schedule C, they no longer automatically meet this condition
- As a result, the SBA now has the right to scrutinize whether these borrowers needed their PPP loan
Your Next Steps
If the new guidelines impact you and your PPP application is in review with BlueVine, we’ll contact you via email with any relevant updates or requests for information.
If you’re a new PPP applicant who would like to apply based on the new regulations, keep an eye on our PPP landing page for updates.
You can still apply if you’re a Schedule C filer and want to use net profit. If you wish to use gross income, BlueVine is currently doing its best to implement this new option.
The SBA has stated that these new guidelines are not retroactive. Previously funded and accepted PPP loans are not eligible to be recalculated based on the new guidelines.
We’ll update this article as new information becomes available.
The information, opinions, and advice in this post are provided for educational purposes only, and do not necessarily state or reflect those of BlueVine and/or its partners, including The Bancorp Bank and Celtic Bank. Neither BlueVine nor its partners are responsible for the accuracy of any content provided by author(s) or contributor(s). For information about BlueVine products and services, please visit the BlueVine FAQ page. For information about the Paycheck Protection Program, please visit the SBA’s page.