The Biden administration announced several Paycheck Protection Program reforms to target the program to the smallest businesses.
What's New: The updates include:
- A 14-day period, starting tomorrow, during which only businesses with fewer than 20 employees can apply for PPP relief. Applications already in the pipeline or requiring error resolution will continue to be processed during this period.
- Revising the loan calculation formula for sole proprietors, independent contractors, and self-employed individuals to use gross income instead of net income, as advocated by ICBA. Further, $1 billion will be set aside for PPP loans to businesses in this category that do not have employees and that are located in low- or moderate-income areas.
- Eliminating qualifying restrictions for small-business owners delinquent on their federal student loans or with prior non-fraud felony convictions.
- Ensuring access for non-citizen small-business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers to apply for relief.
What's Next: The administration also said:
- It has revised the PPP loan applications to encourage self-reporting of demographic data.
- It will conduct stakeholder outreach on PPP challenges.
- The SBA will launch an initiative allowing lenders to submit PPP recommendations and questions and streamlining resolutions.
