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SBA Provides Answer on Foreign Workers and Employee Counts for PPP Loans

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The Small Business Administration (SBA) continues to update its Paycheck Protection Program (PPP) loans Frequently Asked Questions (FAQs), and a recent addition provides clarification on how foreign workers affect the employee computation for PPP loan eligibility.

FAQ 44 states:

Question: How do SBA’s affiliation rules at 13 C.F.R. 121.301(f) apply with regard to counting the employees of foreign and U.S. affiliates?

Answer: For purposes of the PPP’s 500 or fewer employee size standard, an applicant must count all of its employees and the employees of its U.S and foreign affiliates, absent a waiver of or an exception to the affiliation rules. 13 C.F.R. 121.301(f)(6). Business concerns seeking to qualify as a “small business concern” under section 3 of the Small Business Act (15 U.S.C. 632) on the basis of the employee-based size standard must do the same.

The affiliation rules applicable to the PPP are available on the U.S. Treasury website.

Key takeaway:

Nonprofit organizations with international operations will need to include employees whose principal place of residence is outside the U.S. in their headcount for PPP loan purposes. It seems likely that they need to count employees who are not U.S. citizens as well.

Please contact us online or at info@capincrouse.com with questions or to discuss how we can assist your organization.

 

Additional Resource:

Mission Agencies and Paycheck Protection Program Loans

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