April 28, 2020
Yesterday the Treasury released Interim Final Rule on Additional Criterion for Seasonal Employers. The rule gives seasonal employers an alternative period for calculating the “maximum extent practical” for their loan amount. The rules states that the following:
In this rulemaking, Treasury is addressing the needs of certain potential borrowers that are seasonal employers by allowing seasonal employers to use an alternative base period for purposes of calculating the loan amount for which they are eligible under the PPP. Section 1102 of the Act permits seasonal employers to calculate their maximum loan amount by using their monthly average payments for payroll during “the 12-week period beginning February 15, 2019, or at the election of the eligible [borrower], March 1, 2019, and ending June 30, 2019.” Some seasonal employers, however, have seasons that occur later in the year. Without the ability to use an alternative base period, many summer seasonal businesses would be unable to obtain funding on terms commensurate with those available to winter and spring seasonal businesses. This interim final rule addresses that disparity and ensures consistency in program administration by providing a seasonal employer the option of using any consecutive 12-week period between May 1, 2019 and September 15, 2019 for determining its maximum loan amount.
We feel this is a favorable decision for seasonal employers that haven’t had their loan application processed yet. There is no guidance for seasonal employers who have secured a PPP loan and used the previous required dates.