Now that the House has passed an extension to the PPP loan program, the Senate needs add an amendment to the legislation to correct a flaw in the rule change for self employed applicants who can now use their gross income instead of their net income to determine their final loan amount. The fact that the SBA has said that this rule change is not retroactive is affecting tens of thousands of self-employed people whose only mistake was to apply and receive their 2nd round of PPP money before the rule change.
Why is this important?
The rule change is a huge benefit for self-employed people. They can now use their gross income from their Schedule C to determine the final loan amount in the 2nd round of PPP funding. However, not allowing for the rule change to be retroactive to those who already received their 2nd round money is absolutely unfair. This decision is affecting tens of thousands of self-employed people whose only mistake was to apply and receive their 2nd round of PPP money before the rule change.
A CNBC article: "How just a few days cost some small businesses thousands on their PPP forgivable loans explains the issue thoroughly.
