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On February 22, 2021, the new administration announced a special 14 day period during which PPP applications are limited to businesses with fewer than 20 employees. This period is meant to help the small businesses that may have been excluded from the first round of PPP. In addition, the administration is revising the formula for calculating PPP loans so that sole proprietors, independent contractors, and the self-employed can receive financial support. These businesses make up a significant majority of all businesses, but were excluded from the prior round because PPP loans were calculated based on number of employees, and many of these businesses have few or no direct employees. The loan calculation formula for these applicants will be revised to offer more relief. This includes a $1 billion set aside for these businesses without employees located in low- and moderate-income (LMI) areas.
*This window opened on Wednesday February 24, 2021*
This is excellent news for the many small businesses without employees who are trying to maintain their business during the Covid pandemic, a large percentage of which are owned by women of color.
The administration has also directed that several restrictions on access to PPP be eliminated:
There is currently a restriction that prevents small business owners with prior felony convictions from obtaining relief through the Paycheck Protection Program. The SBA will eliminate this restriction with respect to small business owners with prior non-fraud felony convictions, unless the applicant or owner is incarcerated at the time they apply for PPP.
If business owners were delinquent on student debt, PPP funding was unavailable. The SBA will remove this student loan delinquency restriction.
The SBA will issue guidance clarifying that otherwise eligible applicants cannot be denied access to the PPP because they use ITINs (non-citizen legal residents use an ITIN rather than a SSN) to pay their taxes.
