The newest PPP changes announced by the SBA are intended to benefit the smallest of small businesses. PPP loans will be available exclusively to businesses with 20 or less employees and sole proprietors from Wednesday, February 24 through March 10, 2021.
A critical goal from Congress for the latest round of the Paycheck Protection Program was to reach small and low- and moderate-income (LMI) businesses who have not received the needed relief a forgivable PPP loan provides. Congress set a $15B set-aside for small and LMI first draw borrowers. Changes in implementation have directly benefited small businesses with the share of funding up nearly 60% for businesses with fewer than 10 employees; up nearly 30% for businesses in rural communities; and the share of funding distributed through Community Development Financial Institutions (CDFI) and Minority Depository Institutions up more than 40%.
The SBA also announced four additional PPP changes to open the program to more underserved small businesses than ever before. SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse.
These PPP changes will:
- 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
- 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 federal student loan payments by eliminating federal student loan debt delinquency and default as disqualifiers 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 Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
SBA Senior Advisor Michael Roth said “The SBA is a frontline agency working to create an inclusive economy, focused on reaching women-owned, minority-owned, low- and moderate-income, rural, and other underserved communities in meaningful ways.” “The important policy changes we are announcing further ensure inclusivity and integrity by increasing access and much-needed aid to Main Street businesses that anchor our neighborhoods and help families build wealth.”
Borrowers can apply for the Paycheck Protection Program by downloading the First Draw PPP loan application or Second Draw PPP loan application and working with a participating PPP lender through the SBA Lender Match tool.
To discuss how the newest PPP changes can benefit you, please reach out to us. You may also want to bookmark our COVID-19 Resource Center for ongoing news and resources.