On April 27, 2020, the US Department of the Treasury (Treasury) issued an interim final rule (IFR) with additional criterion for seasonal employees under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) created under Title 1 of the CARES Act. In this IFR, seasonal employers are given the option of using an alternative time period for calculating the maximum PPP loan amount for which they are eligible that should more accurately reflect their business seasons. The IFR is effective immediately. Public comment on the proposed rule must be received on or before June 1, 2020.

Section 1102 of the CARES Act allows a seasonal employer to determine its maximum PPP loan amount based on the employer’s average total monthly payments for payroll during the 12-week period beginning February 15, 2019 or, at the election of the borrower, March 1, 2019, and ending June 30, 2019.

Alternatively, the IFR gives a seasonal employer the option of using any consecutive 12-week period between May 1, 2019 and September 15, 2019 to calculate the maximum PPP loan amount for which it is eligible.

Seasonal businesses that were dormant or not fully operating as of February 15, 2020, are still eligible for PPP loans. A seasonal business will be considered to have been in operation as of February 15, 2020, if the business was in operation for any 8-week period between May 1, 2019 and September 15, 2019.

This alternative base period on which to calculate the maximum PPP loan amount should allow employers that have seasons that occur later in the year, such as summer businesses, to obtain PPP loans on terms commensurate with winter and spring seasonal businesses.

For summaries of the SBA PPP, see:

Checklist, CARES Act: Stimulus for Small Businesses Under the SBA.

Checklist, CARES Act: Small Business Administration Payroll Protection Program: Lender Guidance.

For additional guidance from the Treasury Department, see: