Today, the Biden Administration announced several reforms to further target relief to America’s smallest businesses and to ensure that Paycheck Protection Program (PPP) funds are distributed equitably. These reforms include the following changes intended to eliminate barriers that disproportionately harm minority-owned, women-owned, Main Street and other underserved small businesses:
- Starting Wednesday, February 24, 2021 at 9am, the U.S. Small Business Administration (SBA) will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger applicants still have plenty of time to apply for and receive loans before the program expires;
- Allow sole proprietors, independent contractors and self-employed individuals to receive more financial support by revising the PPP funding formula for these categories of applicants. New Schedule C filers will be able to calculate their PPP loan amount using the gross income line on their Schedule C form instead of their net profit line. The SBA will also establish a $1 billion set aside for non-employer Schedule C applicants located in low and moderate-income census tracts;
- Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal;
- 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
- Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use an Individual Taxpayer Identification Number (ITIN) to apply for PPP loans.
Visit SBA.gov for more information on these changes to SBA’s coronavirus relief programs
In order to better capture demographic data about loan borrowers, the SBA also moved the optional question on “PPP Borrower Demographic Information” from the last page to the first page of both the first and second draw PPP loan applications on February 17. The change is intended to increase borrower awareness and capture a higher response rate to better illustrate the impact the PPP is having across various population segments.
According to data released today, since the program reopened to borrowers on January 13, 2021, the SBA has approved 1,918,663 PPP loans for over $140 billion through February 21. In December, Congress approved $284 billion in new PPP funding for small businesses continuing to struggle with the effects of the pandemic. The deadline for applying for a PPP loan is March 31, 2021, and there are currently no plans to extend this deadline.
If you have questions about the Paycheck Protection Program or need assistance applying for a first or second draw loan, please contact a member of our COVID-19 response team at . For additional information on Federal, state and local relief measures, please visit our COVID-19 Resource Center on our website.
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