Paycheck Protection Program: updated guidance for fishermen

July 6, 2020

Now is the last chance for boat owners to get two months of payroll for themselves and their crew!

The U.S. Treasury Department just released new PPP guidance for fishing businesses. This has the potential to help fishermen struggling with the devastating consequences of the pandemic, but the deadline is just days away! All PPP applications must be submitted to the Small Business Administration by your SBA-approved lender by August 8.

The new guidance allows boat owners to include 1099 crew as employees for calculating payroll costs:

  • New Applicants: Include in the payroll calculation the amount you pay your crew, per box 5 of 1099-MISC.

  • If your 1099 crew already received their own PPP loan, you cannot include them in your PPP loan.

  • Boat owners may be able to amend their loan and increase the amount to include your crew, depending on if the funds have been dispersed or if your lender has reported the loan to the SBA on Form 1502. Contact your bank or lender immediately to confirm if you can amend.  

New legislation has also provided more flexibility, making it easier to be eligible for full loan forgiveness:

  • Extend the spending period from 8 to 25 weeks, providing flexibility to borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use the original 8-week period.

  • Reduces the amount that has to be spent on payroll costs from 75% to 60% to qualify for full forgiveness.

  • Increase loan term to 5 years

  • Additional safe harbor provisions and allowances for partial forgiveness.

SBA now has an EZ version of the forgiveness application that applies to borrowers that:

  • Are self-employed and have no employees; or

  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or house of their employees; or

  • Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by 25%.

  • The EZ application requires fewer calculations and less documentation. See the new EZ application form (page 3).

FCC member groups are offering the following COVID-19 related resources:

Please note this information has been collected from official and expert sources; it is accurate at the time of release, but does not represent legal or financial advice. Please consult with your banker, attorney, or accountant to confirm your eligibility and discuss the details of your particular situation.