Five changes to the Paycheck Protection Program (PPP), the government’s plan for helping small businesses survive the Covid-19 pandemic, were announced yesterday by President Joe Biden. The country’s smallest businesses and business owners of color are celebrating these modifications to the PPP.
During the pandemic, the original PPP was helpful to several business but also resulted unequal distributions.
Here are the five critical changes that make the PPP funding more accessible to main street businesses:
- Priority Window for Business Owners with Less than 20 Employees
- Businesses with less than 20 employees will have exclusive access to the application portal for a two-week period starting tomorrow, February 24.
- Better Served Self-Employed/Sole Proprietors
- Self-employed individuals will use gross income (instead of net income) going forward to calculate the PPP loan amount.
- Also, $1 billion has been side aside for businesses in this category without employees located in low- and moderate-income (LMI) areas.
- Support for Second Chance Small Business Owners
- PPP funding is now open to small business owners with prior criminal records.
- Those who have committed to a new life by starting a small business, in turn creating jobs and boosting their communities, now have access.
- Exempt Defaults on Student Loans
- Business owners who are behind on their federal student loan payments will now be eligible for PPP loan forgiveness.
- Originally, business owners who were delinquent on federal student loans could access PPP funds but were required to pay it all back.
- Clarification for Small Business Owners with Visas or Green Cards
- Residents with visas or Green Cards could apply for funding, but guidance on eligibility and access was not clearly outlined.
- Individual Taxpayer Identification Numbers (ITINs) can be used to apply for PPP funding, which helps residents who do not yet have a Social Security Number or Employer Identification Number.
Those business owners who are struggling will greatly benefit by the expansion of the PPP eligibility to effectively rebuild America’s Main Street.
Will There Be More Changes?
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Since COVID-19 began, we have helped dozens of businesses apply for, modify, or otherwise strategize their PPP loan process. Call us at (480) 733-6800 to see how we can help you.