Latest PPP Updates Includes 2-Week Exclusive Access for Employers with Fewer than 20 Employees

President Biden announced changes to the Paycheck Protection Program on February 22, 2021, which  include an exclusive two-week access period for businesses to apply for PPP loans.

Changes Announced on February 22, 2021

• Provide an exclusive 14-day loan application period for businesses with less than 20 employees. For a 14-day period beginning on February 24, 2021 and ending on March 10, 2021, the SBA will only accept PPP loan applications from businesses and nonprofits with fewer than 20 employees. After this 14-day period ends, all eligible businesses and nonprofits will be able to apply for PPP loans until March 31, 2021, the scheduled end date of the Program (see PPP Small Business Loan Application Deadline Extended … Again for new extension information).
• Change the loan calculation formula for sole proprietors, independent contractors and self-employed individuals. To enable sole proprietors, independent contractors and self- employed individuals to receive more financial support through the PPP, the PPP loan funding calculation for this category of applicants will be revised. A fact sheet released by the White House explained that many of these individuals were excluded from the PPP or were approved for loans as little as $1 because of how PPP loans are calculated. The specifics of the changes to the loan calculation formula for these individuals have not been provided yet.
• Set aside $1 billion for businesses with no employees In LMI areas. The SBA will set aside $1 billion in PPP funds for businesses with no employees located in low- and moderate-income (LMI) areas.
• Remove the student loan restriction. In conjunction with the Departments of the Treasury and Education, the SBA will remove the restriction that prevents a business with at least 20% ownership by an individual who is currently delinquent or has defaulted on a student loan within the last seven years from obtaining a PPP loan.
• Eliminate the non-fraud penalty restriction. The Biden-Harris administration will adopt the bipartisan reform co-sponsored by Senators James Lankford (R-OK), Ben Cardin (D-MD), Rob Portman (R-OH), and Cory Booker (D-NJ) that will allow otherwise eligible businesses with an owner who has a non-fraud felony conviction access to the PPP, provided that the applicant or owner is not incarcerated at the time of the PPP loan application.
• Allow applicants to use Individual Taxpayers Identifications Numbers. The SBA will issue clear guidance providing that otherwise eligible applicants cannot be denied a PPP loan because they use Taxpayer Identification Numbers (ITINs) to pay their taxes. Although the statutory PPP language provides that all lawful residents who are otherwise eligible for a PPP loan may access the PPP, the White House fact sheet explains that a lack of guidance from the SBA has created inconsistent access for ITIN holders, such as visa holders or Green Card holders.

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Posted by Attorney Marcia S. Orgill. Orgill concentrates her practice in the area of business and personal taxation—especially complex domestic and international tax strategies. 

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