Interim Final Rule Provides an Alternative Base Period for Calculating Maximum Loan Amount for PPP Loans
The U.S. Department of the Treasury (“Treasury”) has issued an interim final rule that allows seasonal employers that are seeking loans under the Paycheck Protection Program (“PPP”) to use an alternative base period for purposes of calculating their maximum loan amount. Prior to this interim final rule, under the PPP of the CARES Act, seasonal employers were permitted to calculate their maximum loan amount by using their monthly average payments for payroll during “the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.” This period, however, did not allow the Small Business Administration to administer the PPP consistently because some seasonal employers have seasons that occur later in the year. Without the ability to use an alternative base period, summer seasonal businesses would be unable to obtain funding that winter and spring seasonal businesses could.
The interim final rule provides a seasonal employer the option of using any consecutive 12-week period between May 1, 2019 and September 15, 2019 for determining its maximum loan amount. By allowing seasonal employers to use any consecutive 12 weeks within a specified 4.5-month period to calculate its maximum loan amount, the interim final rules ensures that seasonal employers affected by COVID-19 are treated even-handedly.