Businesses and organizations that qualify for Paycheck Protection Program (PPP) loans will now have until May 31, 2021, to apply for first and second draw loans. The new deadline was included in the “Paycheck Protection Program (PPP) Extension Act of 2021” (S. 723/H.R. 1799), passed by Congress in March and signed into law by President Biden on March 30. Click here for the PPP application.

Senator Susan Collins (R-ME), a supporter of the horse industry, stated on the Senate floor last week that more than 190,000 PPP applications were still pending at the Small Business Administration (SBA), emphasizing the need for swift passage of this legislation.

Earlier, the SBA issued a new interim final rule that may increase the PPP loan amount available to sole proprietors (including single-member LLCs) that file a Form 1040, Schedule C. For loans approved after March 3, 2021, Schedule C filers may now calculate their loan amount based on either line 7 gross income or line 31 net profit. Note that total gross income when calculating the amount of a PPP loan is limited to $100,000. If Schedule C (or Schedule F) gross revenues exceed $100,000, then the PPP loan is limited to $20,833. New loan application forms for first and second draw loans accompany the change.

The ability to use Schedule C gross income for sole proprietors is new and could expand PPP loan eligibility to industry participants such as bloodstock agents, sales consignors, racing operations and consultants according to Jen Shah at Dean Dorton, an equine accounting, tax and consulting firm and NTRA partner. Shah also notes that a sole proprietor who files a Schedule C or Schedule F does not need to have employees nor report a tax profit to qualify for a PPP loan under these recent enhancements which calculate the PPP loan based on gross revenues. Borrowers must certify that the uncertainty of current economic conditions makes the loan request necessary to support the business’s ongoing operations.

Industry participants should contact their banks immediately if the above applies.