PPP Update: Increased Lending to Small Businesses
| The Small Business Administration (SBA) and other federal agencies want to improve access to the coronavirus relief program for very small businesses. According to the SBA, less than half of the $284 billion provided for the newest round of the program has been exhausted (as of February 18th). |
On February 22nd, President Biden announced several administrative changes to the Paycheck Protection Program (PPP) that will extend much-needed resources to help small businesses survive, reopen, and rebuild. Some important highlights of these reforms include:
- An exclusive PPP loan application period was established for businesses and nonprofits with fewer than 20 employees. The 14-day exclusivity period began Wednesday, February 24, 2021, and ends on March 10, 2021.
- The following changes will be implemented by the first week of March.
- A revision of the PPPs funding formula will allow sole proprietors, independent contractors, and self-employed individuals access to more financial support.
- The exclusionary restrictions on PPP access for small business owners with prior non-fraud felony convictions and business owners with delinquent or default student loan debt have been eliminated.
- Non-citizen small business owners who are lawful U.S. residents may apply for the PPP using their Individual Taxpayer Identification Number (ITIN).
The Biden administration will announce other changes to the program, including revisions to how independent contractors determine their loan amount and allowing broader access to the program for applicants with non-fraud felony convictions.
The Paycheck Protection Program is only accepting applications from companies with fewer than 20 employees for 14 days (February 24th – March 10th, 2021). The overall program is scheduled to end on March 31.