Starting on Feb. 24, 2021, the SBA is establishing 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This is according to guidance on the SBA and White House sites. According to the statement, this will give lenders and community partners more time to work with the smallest businesses to submit their applications.
The SBA also announced four additional changes to open the PPP to “more underserved small businesses than ever before.” The SBA will:
- Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants.
- Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal.
- Eliminate PPP access restrictions on small business owners who have struggled to make student loan payments by eliminating student loan debt delinquency as a disqualifier to participating in the PPP.
- Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
The statement further noted that a critical goal from Congress for the latest round of PPP was to reach small and low- and moderate-income (LMI) businesses who have not received the needed relief a forgivable PPP loan provides. Although Congress set a $15 billion set-aside for small and LMI first draw borrowers, the current round has only deployed $2.4 billion to small LMI borrowers, “in part because a disproportionate amount of funding in both wealthy and LMI areas is going to firms with more than 20 employees.” The SBA believes this special 2-week window and the other changes will allow the distribution of more funds.
More details are available on the SBA loan resource site. The program is slated to end on March 31, although additional relief programs are expected before then.