Official SBA PPP 1.0 FAQ had this answer:
- Question: What time period should borrowers use to determine their number of employees and payroll costs to calculate their maximum loan amounts?
Answer: In general, borrowers can calculate their aggregate payroll costs using data either from the previous 12 months or from calendar year 2019. For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the period January 1, 2020 through February 29, 2020. Borrowers may use their average employment over the same time periods to determine their number of employees, for the purposes of applying an employee-based size standard. Alternatively, borrowers may elect to use SBA’s usual calculation: the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been operational, if it has not been operational for 12 months).
Are newly established businesses that don't have any 2019 documents still allowed to pick 01/01/2020-02/29/2020 period for PPP 2.0 average payroll cost calculation purposes?
If not, this seems like brutal omission in PPP 2.0 rules, because it creates two weird situations:
- Since gross receipts for businesses established in early 2020 are literally undefined for tax year 2019, then how could such recently established businesses ever testify that their gross receipts in 2020 dropped by 25% compared to corresponding quarter in 2019?
- Those businesses that complied with California's AB-5 and on January 1, 2020 reclassified 1099-MISC workers into W-2 employees have effectively disqualified their "misclassified" employees from letting them to apply for PPP on their own. And in addition government under PPP 2.0 rules is asking these employers to dilute payroll costs for these employees reported on 2020Q1 941 form not just over first 2 months of 2020, but rather all 12 months of 2020.