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New PPP Rules to Help Small Businesses: What You Need to Know

For two weeks, only businesses with fewer than 20 employees will qualify for PPP loans.

Bailey Keppel
Bailey Keppel
2 min read

President Joe Biden has announced temporary changes to the Paycheck Protection Program (PPP) starting Wednesday, February 24 to help smaller, underrepresented businesses and sole proprietors who got crowded out by larger companies in the first PPP loan rounds.

In the first three months of the Paycheck Protection Program—from April to June of 2020—4.8 million loans were administered. This year, there have been 900,000 PPP loan approvals so far in 2021.

Here’s what you need to know about the newest rollout of the PPP.

What are the New Qualifications?

Starting Wednesday, February 24 a new set of PPP rules will go into effect for two weeks. These new guidelines are being established to better support smaller businesses who were overlooked in previous rounds of aid.

Applications will only be accepted for companies with less than 20 employees.

Who Does This Benefit?

The Biden administration issued this new set of guidelines to help the smallest of small businesses who have been said to be overshadowed by larger companies.

This rollout aims to directly support:

  • Businesses with no employees.
  • Self-employed individuals.
  • Sole proprietors.
  • Independent contractors.
  • Farmers and ranchers.

What Does This Mean for More Sizable Small Businesses?

The Paycheck Protection Program is still available to companies with more than 20 employees, but their application acceptance will be put on a two week hold.

How Are the Loans Calculated?

Previously, loans were calculated by a business’s reported annual taxes, which automatically disqualified businesses that were considered “unprofitable.” This often automatically excluded companies with few or no employees.

President Joe Biden has requested a reconfiguration of the loan calculation process for this new rollout. Loans will now be administered based on gross income (which excludes expenses).

The expectation is that even the smallest of businesses will now qualify for the PPP, and those who are accepted to the program will receive more sizable amounts of aid.

What If I Already Received a Loan?

There is debate on how the new process will be implemented for those who have already been issued a loan—and perhaps could now receive a higher amount.

As it stands, the Small Business Administration (SBA) explains they will not change loan amounts retroactively, nor allow current receiving participants to reapply.

When is the Program Deadline?

Despite advocacy for an extension, the PPP deadline remains March 31.

There have been requests to tack on an additional 60 days to the entire program, but the Biden administration has not approved this extension.

How Do I Apply?

To check your eligibility after this new rule rollout, visit the Paycheck Protection Program page on the SBA website.

From here you can:

  • See if your business qualifies.
  • Apply for first-draw PPP loans (initial loan).
  • Apply for second-draw PPP loans (second loan).
  • Get matched with a lender in your area.
  • Find resources for additional Coronavirus relief.
  • See if you are eligible for loan forgiveness.

For updated information on the PPP and other financing options for small businesses, stay tuned with GoSite.


Bailey Keppel
Bailey Keppel
The easiest way to connect your business with more customers.
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