President Biden announced Monday, February 22 that the Administration will make changes to PPP to provide more support for small and minority businesses. The changes will:
- Institute a 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for relief through the Program.
- Revise the loan calculation formula so that it offers more relief to sole proprietors, independent contractors, and self-employed individuals, and establish a $1 billion set aside for businesses in this category without employees located in low- and moderate-income (LMI) areas.
- Eliminate an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the Paycheck Protection Program.
- Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program.
- Clarify that non-citizen small business owners who are lawful U.S. residents may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief.
A critical goal from Congress for the latest round of PPP 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. With existing policies, the current round has only deployed $2.4B to small LMI borrowers, in part because a disproportionate amount of funding in both wealthy and LMI areas is going to firms with more than 20 employees. The less than 20 exclusivity period combined with the changes to expand access for sole proprietors, ITINs, returning citizens, and student loan debt will help us achieve Congressional goals.
The two-week window starts Wednesday, February 24, 2021 at 9 AM EST.