The SBA released a new Interim Final Rule regarding the PPP loan program on April 27, 2020 that provides additional guidance for seasonal employers. The CARES Act provided that, for purposes of calculating the maximum loan amount, seasonal employers could use the 12-week period beginning February 15, 2019, or at the election of the eligible recipient, March 1, 2019, and ending June 30, 2019. In the new Interim Final Rule, the SBA provides that seasonal employers may alternatively elect to use any consecutive 12-week period between May 1, 2019 and September 15, 2019 for purposes of determining its maximum loan amount.
Per the SBA, this change was made in an effort to treat summer seasonal businesses on terms commensurate with those available to winter and spring seasonal businesses. The SBA further determined in this Interim Final Rule that when evaluating eligibility, a seasonal business will be considered to have been in operation as of February 15, 2020 (as required by the CARES Act) if the business was in operation for any 8-week period between May 1, 2019 and September 15, 2019.
This most recent Interim Final Rule makes clear that this guidance merely supplements existing SBA rules for the PPP by establishing alternative criteria for calculating the maximum loan amount for seasonal employers and does not otherwise change existing rules and requirements. All other terms and conditions of the PPP remain unchanged and apply equally to seasonal and non-seasonal businesses. All PPP applicants, borrowers, and lenders should continue to follow all requirements set forth in the CARES Act and SBA regulations, except for the alternative approach described above for calculating the maximum loan amount for seasonal businesses.
.This Client Alert is not a substitute for legal guidance regarding program details and how those may be applicable to your business. As always, if we can be of assistance during this difficult time, please do not hesitate to contact your HH&K attorney. For additional HH&K COVID-19 Information, visit our COVID-19 Resources.
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