SBA Issues PPP Guidance for Sole Proprietors and Business Partners

April 17, 2020

The U.S. Small Business Administration (SBA) has issued supplemental guidance for the Paycheck Protection Program (“PPP”) for self-employed individuals who will file a Form 1040 Schedule C to report their self-employment income in 2019. This Interim Final Rule entitled “Business Loan Program Temporary Changes; Paycheck Protection Program – Additional Eligibility Criteria and Requirements for Certain Pledges of Loans” provides more detailed guidance on the PPP criteria for sole proprietors and business partners, explaining: “if you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership.”