Over 500 Employees? Your Business May Still Qualify as Eligible for the PPP Loan.

If your company failed the 500 or fewer employee test, you may still be eligible to apply for a Paycheck Protection Program (PPP) Loan if you do not exceed two limits, which are defined in recently released Frequently Asked Questions (FAQs) by the Treasury Department. Using the “alternative size standard” below, your business may be eligible. Contact your Lurie advisor for questions. Here is the SBA guidance:

SBA’s “alternative size standard” as of March 27, 2020:

  1. Maximum tangible net worth of the business is not more than $15 million; and
  2. The average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.

Full text of the SBA FAQ on the Alternative Size Standard:

Question: Are small business concerns (as defined in section 3 of the Small Business Act, 15 U.S.C. 632) required to have 500 or fewer employees to be eligible borrowers in the PPP?

Answer: No. Small business concerns can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue- based size standard corresponding to its primary industry. Go to www.sba.gov/size for the industry size standards.

Additionally, a business can qualify for the Paycheck Protection Program as a small business concern if it met both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.

A business that qualifies as a small business concern under section 3 of the Small Business Act, 15 U.S.C. 632, may truthfully attest to its eligibility for PPP loans on the Borrower Application Form, unless otherwise ineligible.

For More Information

Our team will continually update our website with additional guidance and resources. If your business is over 500 employees, but you may qualify on the other factors, please reach out to your Lurie advisor with questions.

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