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Legal Q&A: Notice of PPP Extension, Clarification for Self-Employed Borrowers

Q: Can a Self-Employed Individual Use Gross Income from Both Schedule C and Schedule F to Calculate Loan Amount and Percentage Reduction for a Second Draw PPP Loan?

A: Yes. For a second draw paycheck protection program (PPP) loan, a self-employed individual who is eligible to use gross income from both Schedule C and Schedule F to calculate loan amount should add the gross receipts of their Schedule C business with the gross receipts of their Schedule F business together and compare this sum against the sum of their gross receipts of their Schedule C and Schedule F business gross receipts for their chosen reference period.

Q: Has the PPP Application Deadline Been Extended?

A: Yes. On March 30th, the PPP Extension Act of 2021 (Act) was signed into law, extending the Small Business Administration’s authority to guarantee PPP loans through June 30, 2021. 

However, the new application deadline is May 31st. Thus, while SBA will process loans through June 30th, it will not accept applications past May 31st. Any PPP loan guaranty applications submitted by lenders in the PPP platform before June 1, 2021, must be processed and receive an SBA loan number by 11:59 pm EDT on June 30, 2021. At 12:00 am EDT on July 1, 2021, SBA will shut down processing of any pending PPP loan guaranty applications from lenders for which an SBA loan number has not been issued. The additional time period for processing of PPP loan guaranty applications received before June 1, 2021, allows lenders and SBA to resolve hold codes and compliance check error messages.

Furthermore, SBA has issued a notice modifying SBA Form 3506, 3507, and 750 CA (when used for PPP purposes) (forms) to reflect the Act. The notice modifies the forms for previously-approved lenders by extending the termination date set forth in Section 8 or Section 19 in each such form (as applicable) from “April 1, 2021” to “July 1, 2021.” Revised SBA forms 3506 and 3507 for new lenders will be issued and will be made available at sba.gov/ppp.

If you have any questions on this topic or other matters of compliance, contact WBA’s legal call program at 608-441-1200 or wbalegal@wisbank.com.

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance. 

By, Alex Paniagua