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For two weeks, only businesses with fewer than 20 employees will qualify for PPP loans.
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.
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.
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:
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.
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.
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.
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.
To check your eligibility after this new rule rollout, visit the Paycheck Protection Program page on the SBA website.
From here you can:
For updated information on the PPP and other financing options for small businesses, stay tuned with GoSite.
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