Update: On Tuesday, March 30, 2021, the PPP Extension Act of 2021 was signed into law. It extended the application deadline for PPP loans to May 31, 2021, or until funds run out.
The Small Business Administration (SBA) has announced that for the next two weeks, Paycheck Protection Program (PPP) loan applications will only be open to small businesses with fewer than 20 employees, including non-employers. Here is what you need to know.
PPP loans have been crucial to small businesses in need of capital at a time when they’ve struggled to keep workers employed and doors open, due to the COVID-19 pandemic and government-mandated shutdowns. The 14-day exclusive application window for the smallest businesses is meant to make it easier for them to connect with lenders and apply for PPP loans.
This period of exclusivity begins today, February 24, 2021 and ends Tuesday, March 9, 2021.
Several other changes to the PPP loan program have been announced. These include:
The formula for calculating loans has been adjusted to allow for most business owners with no employees (such as sole proprietors, independent contractors, and self-employed individuals) to apply for larger loans. Additionally, $1 billion will be set aside for businesses without employees that are located in low- and moderate-income (LMI) areas.
The details of how, exactly, the revised loan classifications work have not been released yet. SBA should be releasing details soon.
Several PPP access restrictions have been lifted. This includes small business owners who:
- Have been recently convicted of a non-fraud felony. Those currently incarcerated remain ineligible.
- Have been delinquent or have defaulted on federal debts, including student loans, in the past seven years.
- Are non-citizens but lawful residents of the United States, such as Green Card holders.
The Small Business Administration will now check applicants for fraud and will examine a selection of loans – both the largest ones as well as a random sampling of the rest – for manual review.
The PPP loan application itself has been reworked to obtain more demographic information, and an overhaul of the SBA website for resources on COVID-19 relief options like the PPP is upcoming.
Those who wish to take advantage of the new PPP Enhancement can download the First Draw PPP loan application here and the Second Draw PPP loan application here. You can also find a participating lender through the SBA Lender Match tool here.
You can also view NFIB’s fact sheet on the PPP here.
Eighty-eight percent of NFIB members own small businesses with fewer than 20 employees, with the average member employing 10 people.
NFIB encourages Congress to extend PPP loan applications beyond the absolute deadline of March 31, 2021. If funds remain, small businesses should be able to take advantage of them.
