More Accessible to Very Small Business
By Will Johnson
EAST TEXAS – The Paycheck Protection Plan (PPP) reopened on Wednesday, Feb. 24 with a focus on very small businesses.
The Feb. 24 start date begins a 14-day period during which only businesses with fewer than 20 employees can apply for a PPP loan.
According to the Small Business Association “Specifically, on Wednesday, Feb. 24, 2021 at 9 am ET, 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 PPP-eligible businesses will still have plenty of time to apply for and receive support before the program expires on March 31, 2021.”
In addition, the SBA announced four additional changes to open the PPP to more underserved small businesses than ever before.
“While these changes are being implemented,” the SBA website stated, “SBA will work with community partners to improve the emergency relief “digital front door” and conduct extensive stakeholder outreach. And, SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse.
The four changes are:
- 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 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 Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
A stated 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.
These loans come with a one percent interest rate but may be forgiven if certain criteria are met, which include:
- Employee and compensation levels are maintained.
- The loan proceeds are spent on payroll costs and other eligible expenses.
- At least 60 percent of the proceeds are spent on payroll costs.
Will Johnson may be contacted via e-mail at firstname.lastname@example.org.