PPP Loans: Increase Your PPP Loan | Wendel Rosen LLP


On April 28, 2020, the Small Business Administration (SBA) released an interim final rule on Paycheck Protection Program (PPP) disbursement requirements. The interim final rule stated that: (i) the borrower cannot make multiple draws on a PPP loan and thus delay the start date of the covered period by 8 weeks; and (ii) lenders must electronically upload Form SBA 1502 indicating that PPP funds have been disbursed within 20 calendar days of approval of a PPP loan or, for PPP loans approved prior to the reporting process set. update of form SBA 1502, before May 22, 2020.[1]

On May 13, 2020, the SBA issued an interim final rule on PPP loan increases.

The new rule allows a partnership that received a PPP loan that originally did not include any compensation for its partners, to request a loan increase to include compensation for the partners.[2] To request a loan increase, the partnership would have to notify its lender, and the lender would submit an application electronically to the SBA. In order to request a PPP loan increase, the partnership must provide its lender with the required documents to support the calculation of the requested increase. The SBA clarified that the lender can submit a loan increase request even if the PPP funds have been fully paid to the partnership. However, the demand for increased PPP loan must come before the lender submits a report of Form 1502 to the SBA.

The new rule also states that seasonal employers who received a P3 loan before the SBA posted another period to calculate the “maximum practical measure” for their loan amount can apply for a loan increase. That is, if the seasonal employer was eligible for a higher maximum loan amount under the alternative test.[3] The lender can submit a loan increase request even if the P3 funds have been fully paid to the seasonal employer. However, the demand for increased PPP loan must come before the lender submits a report of Form 1502 to the SBA.

In both cases, the loan can not be increased after the Initial Report for Form 1502 has been submitted to the SBA, or after the date the Initial Report for Form 1502 was due to be submitted to the SBA (May 22, 2020).


[1] On May 8, 2020, the deadline of May 18, 2020 was extended to May 22, 2020.

[2] The provisional final rule published on April 14, 2020 stipulated that the self-employment income of general partners could be reported as salary costs (up to $ 100,000 annualized).

[3] The provisional final rule on the additional criterion for seasonal employers can be viewed here.

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