On Monday, February 22, President Biden announced changes to the PPP loan program, which has been a critical tool of the United States Federal Government in helping businesses stay open during the COVID-19 Pandemic.
Starting Wednesday, February 24, 2021 at 9 am, the SBA established a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. SBA also announced four additional changes to open the PPP to more underserved small businesses than ever before:
1. Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants;
2. Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal;
3. Eliminate PPP access restrictions on small business owners who have struggled to make student loan payments by eliminating student loan debt delinquency as a disqualifier to participating in the PPP; and
4. Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
The clear goal of these changes is to help the many minority-owned and very small businesses in low-income areas who have not been able to receive aid from the PPP program. The changes are also designed to make it easier for businesses with no employees — sole proprietors, independent contractors, and self-employed people such as house cleaners and personal care providers — that previously could not qualify because of business cost deductions.
If you need any assistance in navigating this extending PPP loan application period, please feel free to reach out to Kemp Klein.
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