In an effort to target smaller businesses, the Biden-Harris administration announced changes to the Paycheck Protection Program (PPP). From Wednesday, February 24, 2021 – March 10, 2021, businesses with 20 or fewer employees will have exclusive access to PPP funding. Furthermore, the White House will set aside $1 billion in PPP funding for businesses in low- and moderate-income areas that do not have employees. Additionally, as the PPP loan amount calculation is based upon a payroll factor, the Biden-Harris administration will also modify the loan calculation formula so that businesses with fewer employees (i.e., sole proprietors, independent contractors and self-employed individuals) can still gain access to this vital funding. While the details of the modification have yet to be announced, gross income, rather than net profit, will likely drive the loan amount calculation for these borrowers.
The White House revealed other changes to the PPP as well, including the elimination of restrictions on certain borrowers with prior non-fraud felony convictions, as well as those with delinquent federal student loans, from obtaining relief. Lastly, the White House has directed the Small Business Administration (SBA) to issue clear guidance confirming that otherwise eligible lawful U.S. resident applicants may use Individual Taxpayer Identification Numbers (ITINs) to apply for PPP funding.
For more information on these updates, we invite you to register for Sax’s “Recovery Update” on Thursday, March 4 @ 10am for an overview of COVID-19 relief programs and loan forgiveness.
REGISTER HERE
Sax will continue to update you as further details are made available. Reach out to your Sax advisor or email covid19@saxllp.com with questions. For more and on-going information relative to your state and business, visit Sax’s COVID-19 Resource Center.