PPP Loans: Increasing Your PPP Loan

On April 28, 2020 the Small Business Administration (SBA) issued an Interim Final Rule on Paycheck Protection Program (PPP) disbursement requirements. The Interim Final Rule stated that: (i) the borrower cannot take multiple draws from a PPP loan and thereby delay the start date of the 8-week covered period; and (ii) lenders must electronically upload SBA Form 1502 indicating that PPP funds have been disbursed within 20 calendar days after a PPP loan is approved or, for PPP loans approved before the updated SBA Form 1502 reporting process, by 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 apply for a loan increase to include partner compensation.[2] To apply for a loan increase, the partnership would have to notify its lender, and the lender would electronically submit a request to the SBA. In order to apply for a PPP loan increase, the partnership must provide its lender with required documentation to support the calculation of the requested increase. The SBA clarified that the lender may submit a request for a loan increase even if the PPP funds have been fully disbursed to the partnership. However, the application for an increase to the PPP loan must come before the lender submits a Form 1502 report to the SBA.

The new rule also states that seasonal employers who received a PPP loan before the SBA posted an alternative period to calculate the “maximum extent practical” for their loan amount may apply for a loan increase. That is if the seasonal employer would be eligible for a higher maximum loan amount under the alternative criterion.[3] The lender may submit a request for a loan increase even if the PPP funds have been fully disbursed to the seasonal employer. However, the application for an increase to the PPP loan must come before the lender submits a Form 1502 report to the SBA.

In both cases, the loan cannot be increased after the initial Form 1502 report has been submitted to SBA, or after the date the initial Form 1502 report was required to be submitted to SBA (May 22, 2020).


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

[2] The Interim Final Rule posted on April 14, 2020 stated that self-employment income of general active partners could be reported as a payroll cost (up to $100,000 annualized).

[3] The Interim Final Rule on Additional Criterion for Seasonal Employers can be found here.