The Biden administration this week announced five major changes to the payroll protection program to make access to P3 loans fairer, which could make a big difference for small businesses. As of February 24, 2021, the U.S. Small Business Administration will begin accepting applications for PPP loans exclusively for businesses with less than 20 employees and sole proprietors.
The application period will run for two weeks, with the SBA accepting applications for the program until March 10, 2021. If your company has 20 or fewer employees, check the box SBA website to find a lender, find the loan that’s right for you, and more. Borrowers may also be eligible for a PPP loan discount here.
These changes are critical for small businesses nationwide, considering only an estimate 5 percent small businesses have received support so far. According to United States today, we have said goodbye to 400,000 small businesses since the start of the pandemic. To help prevent these numbers from continuing to climb, it is essential that independent retailers receive the help and support they need to weather the pandemic.
SBA too announced four more changes open up PPP to more underserved small businesses than ever before. As these changes are implemented, SBA will work with community partners to improve the “digital gateway” to emergency relief and conduct broad stakeholder outreach. The organization will also strengthen its relationships with lending partners to advance equity goals, provide finance effectively, and prevent fraud, waste and abuse.
Here are the four additional changes:
- Allow sole proprietors, independent contractors and self-employed workers to receive more financial support by revising the PPP funding formula for these categories of applicants
- Remove exclusionary restriction on access to P3s for small business owners who have previously been convicted of non-fraud crimes, in line with bipartisan congressional proposal
- Eliminate P3 access restrictions for small business owners who have struggled to repay their student loans by eliminating student loan defaults as a barrier to P3 participation
- Ensure access to non-citizen small business owners who are legal residents of the United States by specifying that they can use the Individual Tax Identification Number (ITIN) to apply for the PPP.
A key congressional goal for the last PPP cycle was to reach out to small businesses and low and moderate income (LMI) businesses that did not receive the needed relief that a repayment PPP loan provides. Congress has set aside $ 15 billion for small borrowers and early IMT borrowers. With existing policies, the current cycle has only rolled out $ 2.4 billion to small LMI borrowers, in part because a disproportionate amount of funding in wealthy and LMI areas goes to companies with more than 20 employees. The under 20 year exclusivity period combined with changes to expand access to sole proprietorships, ITINs, returning citizens and student loan debt will help us meet Congress goals.