CLIENT ALERT: PPP Loan Increases for Partner Compensation

CLIENT ALERT: PPP Loan Increases for Partner Compensation

  • If a partnership received a PPP Loan that only included amounts necessary for payroll costs of the partnership’s employees and other eligible operating expenses, but did not include any amount for partner compensation, then:
  • The PPP Loan amount may be increased to include appropriate partner compensation (even if the loan has been fully disbursed), provided that the lender’s first SBA Form 1502 report to SBA on the PPP Loan has not been submitted.
  • After the initial SBA Form 1502 report on the PPP Loan has been submitted to the SBA or after the date the first SBA Form 1502 was required to be submitted, the loan cannot be increased.
  • In no event can the increased loan amount exceed $10 million for an individual borrower or $20 million for a corporate group.
  • The borrower must provide the lender with required documentation to support the calculation of the increase.
  • Seasonal employers that received a PPP Loan before the SBA’s alternative criterion was posted on April 28, 2020 are also able to seek a higher loan amount subject to the same standards provided above.
  • Increases submitted outside the required timeframe will not be forgiven and no processing fee will be earned on such amounts. 
  • If a borrower’s PPP Loan has already been fully disbursed, the lender may make a single additional disbursement of the increased loan proceeds prior to the submission of the initial SBA Form 1502 report for that loan. 

The Interim Final Rule on PPP Loan Increases can be located here: 

The SBA’s alternative criterion for seasonal employers can be located here: 

*The Attorneys at Levene Gouldin & Thompson, LLP are available to provide advice and counsel concerning these new statutory obligations and other matters related to COVID-19.


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