Feb 23, 2021
On Monday, the Biden administration announced significant changes to the Paycheck Protection Program (PPP) aimed at assisting those businesses who had previously been unable to access funding. These provisions include:
Small Business Priority Window For Applying – Starting Wednesday at 9 a.m. EST, small businesses with fewer than 20 employees will have a two-week exclusive window, ending March 9 at 5 p.m. EST to apply for the funding. During this time, larger businesses will be prohibited from apply allowing lenders to focus on the smallest businesses
Funding Formula Altered for Self-Employed, Sole Proprietors, and Independent Contractors – To improve equitable distribution of loans, the PPP funding formula for these categories of applicants has been modified to allow for more money. Previously self-employed and sole-proprietor loan applicants would use “net income” to calculate their loan amount which dramatically reduced the value of PPP funds as it excluded eligible expenses. Now, this group will use gross income to make such calculations which ultimately will allow for more funds.
Lifted Restrictions for Certain Businesses – Restrictions that once prevented some specific small business owners from obtaining relief have now been eliminated. These include:
- Business owners with prior non-fraud felony convictions are now able to apply for relief whereas before they were prohibited.
- Business owners delinquent on their federal student loans could initially access PPP funds, but could not receive the loan forgiveness. New changes allow for this group of individuals to be eligible for forgiveness.
- Those who do not yet have a Social Security Number or Employer Identification Number can apply for PPP funding using their Individual Taxpayer Identification Numbers (ITINs). This new modification prohibits lenders from denying PPP funding to business owners who use ITINs to pay their taxes.
These new changes will allow for more businesses to obtain federal funds through the Paycheck Protection Program. Should you have questions regarding your circumstance, please reach out to our PPP Task Force or to your William Vaughan Company advisor.
Connect with Us.
Michelle Klement, CPA
PPP Task Force Partner
419.891.1040 | email@example.com